Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

BARNSLEY CORPORATION BILL [Lords] (By Order)

Second Reading deferred till Monday next.

PETITION

Experiments (Living Animals)

Mr. Shurmer: I beg to ask leave to present a humble Petition, signed by 272,762 citizens of Great Britain and Northern Ireland, which states that
the practice of experimenting on living animals in the supposed interests of mankind is continually being extended; that such practice necessarily involves the infliction of much pain and suffering upon defenceless creatures; and that the money spent thereon could better be diverted from such experiments of doubtful and disputed value to other avenues of investigation…
Wherefore your petitioners pray that experiments on living animals be prohibited by your honourable House. 
And your petitioners as in duty bound, will ever pray." 
To lie upon the Table.

Oral Answers to Questions — NATIONAL FINANCE

Nelson Annuity

Lieut.-Colonel Bromley-Davenport: asked the Chancellor of the Exchequer when he will be in a position to make a statement into his investigations about the Nelson annuity.

Sir F. Medlicott: asked the Chancellor of the Exchequer if he is now able to make a statement with regard to the Nelson annuity, and if he will in particular make known what official proposals have in the past been made to the Nelson

family for the commuting of this pension in return for a lump sum.

Lieut.-Colonel Lipton: asked the Chancellor of the Exchequer whether he will make a further statement on the Nelson annuity.

The Chancellor of the Exchequer (Mr. Harold Macmillan): I have now considered this matter, but I have decided that we cannot contemplate further legislation. The question of commutation in return for a lump sum was discussed with the Nelson family in 1889 and 1904. On the first occasion commutation for 27 years purchase was offered, but this offer was not accepted by the Nelson family; on the second it was considered that a similar proposal would have been too unfavourable to the Exchequer. and the matter was dropped.

Lieut.-Colonel Bromley-Davenport: Is my right hon. Friend aware that today is Waterloo Day and that the heirs of the Duke of Wellington got full compensation? Why should the heirs of Lord Nelson have £5,000 a year stolen from them and get no compensation whatever? Why should they be singled out for this dishonest treatment, and would my right hon. Friend consider making a more favourable statement before Trafalgar Day in October?

Mr. Macmillan: The views held on this side of the House on that matter are well known, but I do not think it is possible now to go back. I think it was a very rough affair. On the other hand, one must take into account that at the time the annuity was terminated permission was given for the sale of the Trafalgar estates, which could not be sold before, and that was some compensating advantage to the family concerned.

Mr. Jay: Is not the hon. and gallant Member for Knutsford (Lieut.-Colonel Bromley-Davenport) as usual, in error, and was not yesterday Waterloo Day?

Lieut.-Colonel Bromley-Davenport: I did not hear what was said by the right hon. Member for Battersea, North (Mr. Jay) but whatever it was, I am sure it was not worth listening to.

Sir F. Medlicott: Would my right hon. Friend say whether any further discussions took place with the Nelson family before the pension was actually terminated?

Mr. Macmillan: Not under this Administration.

Lieut.-Colonel Lipton: Is the right hon. Gentleman aware that the Government of the day did a great injustice by flouting the express wish of Lord Nelson that provision should be made for Lady Hamilton and their daughter, and that in the circumstances the right hon. Gentleman is doing the right thing by turning a blind eye on the efforts of the hon. and gallant Member for Knutsford (Lieut.-Colonel Bromley-Davenport)?

Mr. Macmillan: That is another question.

European Countries (Common Market)

Sir R. Boothby: asked the Chancellor of the Exchequer the policy of Her Majesty's Government in respect of the proposal for the gradual establishment of a common market by six European countries; and whether he will enter into discussions about this project with the Governments of the countries concerned.

Mr. H. Macmillan: Her Majesty's Government are giving very careful consideration to the implications for the United Kingdom of this proposal, and are considering how best to keep in touch with its development.

Sir R. Boothby: Whilst thanking my right hon. Friend, may I ask him to bear in mind that it would be very unfortunate if a common market were to be formed in Europe, with great reciprocal advantages to the countries concerned there, and we were completely excluded?

Mr. Macmillan: Yes, Sir. As my hon. Friend knows, this is a very large and difficult question. I think that perhaps the meeting of Commonwealth Prime Ministers will be of advantage to us at the moment because we shall have to consider its implications together with their views.

Sterling Area Countries (Monetary Policies)

Sir R. Boothby: asked the Chancellor of the Exchequer what steps are being taken to co-ordinate the monetary policies of countries within the sterling area through close co-operation between their central banks.

Mr. H. Macmillan: The Governments of sterling area countries are responsible for their own monetary policy and for such co-ordination as is felt desirable and practicable with the monetary policies of other sterling area countries. The close relations which exist between the Bank of England and the central banks of other countries in the sterling area assist in such co-ordination.

Commonwealth and Empire

Major Legge-Bourke: asked the Chancellor of the Exchequer if he will, in so far as such policies impinge upon the metropolitan economy, resist all further attempts by the United States of America, whether operating through State, departmental or other channels, to federate by economic means those territories of the free world which are part of the British Commonwealth and Empire.

Mr. H. Macmillan: I fear I do not altogether understand what my hon. and gallant Friend has in mind. I know of no such attempts.

Major Legge-Bourke: Is my right hon. Friend not aware that, ever since the end of the war and ever since we resigned the right of discriminating in trade, we have steadily seen American economic power grow and our own wane? Will he bear in mind that if he wants to ensure that there is a future for the British economy it is essential that we should do everything in our power so to arrange our taxation that British companies do not have to sell out to American companies, thus lowering our own power?

Mr. Macmillan: I think that my hon. and gallant Friend is rather anticipating the discussion which we shall have later in the day. [HON. MEMBERS: "Tomorrow."] No, I mean the Clause dealing with taxation of companies overseas. In the picture which my hon. and gallant Friend has painted I think that, whilst we should maintain, and do everything we can to maintain, the strength and power of the British Empire and Commonwealth, it would be foolish to think that in the present situation of the world that can be done except by the closest partnership with the United States.

Mr. H. Wilson: Does not the Chancellor agree, however, that the reasons why these difficulties are so acute at


present is that the economic policies of the Government have entirely failed to produce the surplus of £300 million for overseas investment which was held out by the Lord Privy Seal in his Budget speech in 1953 as absolutely essential?

Mr. Macmillan: No; I think that, as often, the right hon. Member has taken a narrow and peevish view of a great question.

Cost of Living

Mr. Lewis: asked the Chancellor of the Exchequer if he is aware that, due to the continued rise in the cost of living, many trade unions in a number of industries have, since 31st May, tabled wage claims affecting thousands of workers; and, as these increases, when granted, will again increase the cost of our commodities and thereby the cost of living, whether he will now announce the Government's plan for stabilising and reducing the cost of living.

Mr. H. Macmillan: As I have made clear on several occasions, our best hope for stabilising and reducing the cost of living is that both sides in industry should exercise the utmost restraint in their demands for increases in their money incomes. I feel sure I can rely on the hon. Gentleman's help in making this clear to all concerned.

Mr. Lewis: If the Chancellor can rely on the hon. Member, can the hon. Member rely on the Chancellor and the Government to see to it that they do not take any positive action—as they have done for the last five years—deliberately to increase the cost of living and thus compel trade unions to ask for more money for their members?

Mr. Macmillan: This prospect of mutual reliance between the hon. Member and myself is one I very much welcome and this new coalition will mark a great advance.

Mr. Jay: Does the right hon. Gentleman think it reasonable to take all control off prices, profits, dividends and building and then to ask for wage restraint?

Mr. Macmillan: It was the right hon. Gentlemen opposite who made a bonfire of controls.

Government Expenditure(Economies)

Mr. Hamilton: asked the Chancellor of the Exchequer whether he will give an assurance that in effecting economies in Governmental expenditure no increases will be made in National Health Service charges.

Mr. H. Macmillan: I would ask the hon. Member to await a general statement on the Government's economy measures. which I propose to make shortly.

Mr. Hamilton: Before he makes that announcement, will the Chancellor bear in mind, first, the recommendations of the Guillebaud Committee, and, secondly, that the Government no longer enjoy the confidence of the country, if we accept the implications of Tonbridge, and that the alternative Government is pledged to remove all these charges?

Mr. Macmillan: The hon. Member seems to be more engaged in making his point than in asking a question.
The following Question stood upon the Order Paper:
12. Mr. LEWIS: To ask the Chancellor of the Exchequer whether he is now in a position to announce details of the Government's intended cut of £100 in the current financial year.

Mr. Speaker: Mr. Lewis.

Mr. Lewis: On a point of order. May I draw your attention, Mr. Speaker, to a typographical error in the second line of Question No. 12? After the word "£100" should be inserted the word "million"—unless this is intelligent anticipation on the part of the printer.
May I now ask Question No. 12?

Mr. H. Macmillan: I have nothing to add to the Answer which I gave to the hon. Member on this subject on 12th June.

Mr. Lewis: May I ask the Chancellor for two assurances: first, that he will make the announcement before the result of the Newport by-election; and, secondly, that he will give an assurance that there will be no cuts in the social services and no action taken which will increase the cost of living? I should particularly like an affirmative answer to the latter question.

Mr. Macmillan: I think that the hon. Member had better await my statement.

Welsh Folk Museum, Cardiff

Mr. Idwal Jones: asked the Chancellor of the Exchequer what applications for grants towards capital development have been received from the Welsh Folk Museum, St. Fagans Castle, Cardiff; what decision has been reached upon the applications; and the reason for the decision.

Mr. H. Macmillan: This museum is a department of the National Museum of Wales which has from time to time asked for money in respect of capital development, including some in respect of the Folk Museum. Economic circumstances have not, however, permitted me to provide it. The rate of expansion of this department is reflected in the amount which I provide for maintenance expenditure, now nearly nine times what the amount was as many years ago.

Mr. Jones: Is the Chancellor aware that this is the pioneer folk museum of the whole Commonwealth, and the present arrangements prevent capital development of the museum? Is he prepared to put this Folk Museum on the same basis as the National Library of Wales and the National Museum of Wales, and revise the Treasury decision which prevents the Folk Museum using moneys from fees and sales for capital development?

Mr. Macmillan: These are rather obscure arguments between the Folk Museum and the National Museum of Wales, but what I have said is that this Folk Museum is a department of the National Museum of Wales and it is through the National Museum that we normally deal.

Mr. Jones: On a point of order. I asked the question whether, in view of the present arrangements, the Chancellor is prepared to put the National Folk Museum on the same basis as the National Museum of Wales—

Mr. Speaker: I am afraid that I have nothing to do with that as a point of order.

Trinidad Oil Company

Mr. Gough: asked the Chancellor of the Exchequer whether he will make it a condition of Government permission for the sale of the Trinidad Oil Company that the dollar proceeds be used for Commonwealth development.

Mr. H. Macmillan: No, Sir. The dollar proceeds will accrue to the gold and dollar reserves, where they will be available for any purpose for which dollars may properly be acquired under current policies.

Mr. Gough: Would not my right hon. Friend agree that these dollars might be used to repay the World Bank in respect of its investment, for instance, in the Kariba Dam project and thereby ensure that the very valuable contracts arising out of that shall come to British hands and not Italian hands, as appears to be the case at the moment?

Mr. Macmillan: Yes, Sir, the increase in the dollar reserves will make it possible, no doubt, to approve of projects which otherwise it might have been difficult to agree to. All that will be helpful and valuable, but I must issue a warning against any idea that we should make a kind of separate individual island of United Kingdom reserves, because that would really be contrary to the whole system of the general sterling area banking for which we are responsible.

Mr. J. Griffiths: Does not the Chancellor agree that what is happening at present in regard to the Kariba scheme is a further indication that we are failing as a country to meet the need for economic development in the Common. wealth, and that this is a matter which ought to be seriously considered by the Government and by the House?

Mr. Macmillan: I think "failing" is a strong word, and in any event that is not the Question on the Order Paper; but of course the greater we can make the successful working of our operations in our balance of reserves and balance of trading the greater can be our contributions to investment in the world in general—in the Commonwealth, the Empire, and the outside world. That is the object of our whole policy.

Mr. Gower: Is it not possible that the dollars to be earned in this way will be dissipated, or spent, in a manner which will not ensure dollar earning power equal to the assets now being sold?

Mr. Macmillan: No, Sir; I hope that this increase, as it accrues, will make it possible for us to make approvals of investment in countries such as Canada larger than those taking place now, and that we can improve this rate.

Mr. H. Wilson: In view of the answer which the right hon. Gentleman has given to my right hon. Friend the Member for Llanelly (Mr. J. Griffiths), with which we all agree—that it is a question of getting a sufficient surplus—is he not aware that that was exactly what I was asking two or three minutes ago, when he described my attitude as narrow and peevish?

Mr. Macmillan: Yes, Sir, the attitude of mind with which the right hon. Member approached it was, as always, narrow, partisan and peevish.

Mr. Shinwell: Is there not something to be said, when we sell Commonwealth assets—and this is a Commonwealth asset—for the suggestion that we might earmark the proceeds for the purposes of Commonwealth development? Is not the right hon. Gentleman aware that both in Australia and South Africa there is a dire need of capital investment which cannot be met in any other way?

Mr. Macmillan: That is what I was saying. I very much hope that it will be possible to approve greater investment in the sterling area, but I must repeat that any suggestion that we should make a separate United Kingdom account of this money would be contrary to the spirit and regulations of the whole sterling area system.

Air Commodore Harvey: Will my right hon. Friend give two assurances—first, that none of this money will reach Colonel Nasser, and, secondly, that the money will not be frittered away in the same way as the party opposite frittered away the foreign investments in the Argentine and elsewhere?

Mr. Macmillan: I shall try not to follow that terrible precedent.

Mr. S. N. Evans: asked the Chancellor of the Exchequer whether he will make it a condition of the sale of the Trinidad Oil Company that the price paid by the Texas Oil Company should be in the form of a transfer of shares from the Texas company's holding in the Arabian American Oil Company, so as to entitle Britain to a seat on the board of the latter company.

Mr. H. Macmillan: No, Sir.

Mr. Evans: Is not the Chancellor aware that that is a very unsatisfactory

Answer? How do we bring influence to bear on this company, which is actively engaged in anti-British propaganda, if we do not seize an opportunity such as that which the sale of this company presents? Is the Chancellor aware that Aramco, in which the Texas Oil Co. and its partners, Standard of California, have a 60 per cent. holding, has been responsible for more friction between Britain and the United States than Chiang Kai-shek and Formosa?

Mr. Macmillan: The broad question will be the subject of debate tomorrow. What I have to decide is whether, under the Exchange Control Act, which I have to administer, authority should be given to any particular transaction. I do not think that the proposal made in the Question would be a proper condition for the Treasury to make. [HON. MEMBERS: "Why not?"] We will argue it in detail tomorrow. I do not think it would be in the spirit of the Exchange Control Act, which was passed for the special purpose of defending sterling. That is the Act which I have to administer. I do not think that such a condition would be wise, and I do not think it would be acceptable. because it would have the result of altering the percentage of holdings of the different companies which form Aramco. In the long run—and this we can also argue tomorrow—the closer the relations between the oil companies and the closer the relations between the British Government and the American Government, the better we shall be able to deal with the problems which undoubtedly arise in the operation and the propaganda in the territory which the hon. Member has in mind.

Mr. Gower: asked the Chancellor of the Exchequer if he will now take steps to enable the control of the Trinidad Oil Company to be retained in the hands of people of the British Commonwealth; and if he will make a statement.

Mr. Hunter: asked the Chancellor of the Exchequer whether he will take steps to prevent the control of the Trinidad Oil Company being sold to United States interests.

Mr. H. Macmillan: I have nothing to add to the statement I made to the House on 14th June.

Mr. Gower: In view of the fact that the United States, with its comparatively large resources of oil, nevertheless finds it necessary to place severe legal restrictions on the foreign control of its mineral and oil resources, does my right hon. Friend think that we, with our far poorer resources as a nation and a Commonwealth, can afford to be less careful than the United States? Secondly, following his statement last week, can my right hon. Friend now say that there is the same unanimity in the Caribbean and in Trinidad towards this transaction?

Mr. Macmillan: I hope that my hon. Friend will not think me discourteous if I do not answer the details of his Question. We propose to debate this subject for four or five hours tomorrow afternoon, and it is much more easily dealt in debate and in speeches than in Question and Answer.

Mr. Hunter: Is the right hon. Gentleman aware that there is great public feeling against the sale of the shares of this company to American interests, except among those engaged in the City of London in this transaction? Will he bear in mind the great public feeling against this transaction?

Mr. Macmillan: Yes, Sir, but it is the broad economic, financial, political, imperial and international aspects which we propose to debate tomorrow afternoon, I think on the Motion for the Adjournment.

Several Hon. Members: rose

Mr. Speaker: We should not anticipate tomorrow's debate. Dame Irene Ward.

Civil Service (Equal Pay)

Dame Irene Ward: asked the Chancellor of the Exchequer if he will make arrangements to ensure that when the proposals of the Joint Committee on the Report of the Royal Commission on the Civil Service are introduced, the assimilation anomalies resulting from the gradual scheme of equal pay which have been brought to his attention will be removed.

Mr. H. Macmillan: The arrangements ensure that no woman will receive less than the full amount to which she is entitled from time to time under the

scheme for the gradual implementation of equal pay, and I do not think that any anomaly arises.

Dame Irene Ward: In view of the fact that this is a very complicated question, which has aroused great antagonism among the women in the Civil Service, who regard the present suggestion as a very mean action, may I, before I express an opinion and before a final decision is taken, ask my right hon. Friend whether he will receive me privately to discuss the matter? He dare not deal with the teachers in the way in which he is dealing with the civil servants, and I have very strong views about it.

Mr. Macmillan: As my hon. Friend, has said, this is a very complicated question. [An HON. MEMBER: "The hon. Lady should take a bodyguard."] I should be very glad to discuss the matter with her and with any assessors or friends she likes to bring with her.

Hospital Building Schemes

Mr. K. Robinson: asked the Chancellor of the Exchequer if he is now able to adopt the recommendation of the Guillebaud Committee that the Ministry of Health should no longer be required to submit hospital building schemes of less than £100,000 for prior approval by the Treasury.

Mr. H. Macmillan: This matter is still under consideration.

Mr. Robinson: Is not the right hon. Gentleman aware that he has had six months in which to consider this matter, which needs only consultation with his right hon. Friend the Minister of Health? Is he further aware that this detailed control of hospital development is anathema, not only to his right hon. Friend, but also to the regional hospital boards? When can we have a decision?

Mr. Macmillan: It is not quite as simple a matter as the hon. Member suggests. The present limit applies not merely to hospital buildings but to all other civil and defence projects. What I have to consider, therefore, is not merely the effect upon the administration of the hospital services, but the broad effect, if I were to change this structure, over the whole field of Government capital expenditure.

Mr. Blenkinsop: Would the right hon. Gentleman not agree that this treble check on this form of expenditure causes a great deal of frustration to the boards and to those other voluntary persons who are at present giving their services?

Mr. Macmillan: I want the hon. Member, who understands this matter, has been in public office and has had to administer great capital expenditure, to see the problem which is involved in making a system for this expenditure completely different from the system for any other form of Government approved capital expenditure. Frankly, I hesitate to take that step.

Covent Garden Opera House (Grant)

Dame Irene Ward: asked the Chancellor of the Exchequer whether, in view of the continuing losses on Covent Garden and the need for a change in the administrative and artistic policy, he will consider removing the subsidy responsibility from the Arts Council and making a direct grant in aid with a condition that a new board independent of the Council should be established on lines similar to those of the Tate Gallery and other national museums.

Mr. H. Macmillan: No, Sir. I regard it as very desirable that the Arts Council should continue to adjudicate upon the competing claims for the Government grant which it at present administers.

Dame Irene Ward: While being a wholehearted supporter of the generous subsidising of the arts, might I ask if my right hon. Friend is aware that a great many knowledgeable people think that there should be a complete alteration, artistic and administrative, in the management of Covent Garden, which is now wasting a great deal of public money? I do not dissent from my right hon. Friend's remarks about the Arts Council, but is my right hon. Friend further aware that I do not think that the Arts Council is strong enough, either in personality or in argument, to deal with the management of Covent Garden, and will he take some steps to strengthen it?

Mr. Macmillan: I have to deal with a large number of Parliamentary Questions and a great number of letters and approaches to me, some wanting more public money to be spent on Covent

Garden and about an equal number wishing a less sum of money to be spent on Covent Garden, so I find the inter-position of the Arts Council quite a convenient instrument.

Dame Irene Ward: Everyone wants Covent Garden cleaned up.

Mr. Speaker: Order. Mr. Bennett.

Investment, Canada (Dollar Provision)

Mr. F. M. Bennett: asked the Chancellor of the Exchequer the total dollar allocation for United Kingdom private investment in Canada in 1955; and what increase is under consideration for the current year.

Mr. H. Macmillan: There is no fixed allocation; our policy is to provide dollars, within the limits of our resources, for direct investment in Canada which will benefit the United Kingdom economy. The amounts authorised were £32 million in 1955 and £18 million in the first five months of 1956.

Mr. Bennett: Whilst agreeing with the Chancellor's early remarks that, for the reasons he has given, it would be wrong to earmark any specific sum of dollars arising from a recent oil deal, may I ask my right hon. Friend if he would not agree that this does give a splendid opportunity vastly to increase investment in Canada without in any way encroaching on our capital reserves? Is he further aware that many of us on this side of the House welcome this deal only on the assurance that something on those lines will follow?

Mr. Macmillan: I want to make two things clear. There is no preconceived ceiling or allocation, and if, as I hope, suitable proposals for investment come along, the result of this increase, or an increase in the reserves, will make it easier to agree to those proposals.

Mr. Woodburn: Is the Chancellor aware that there is an opportunity for tremendous development, in addition to oil, between Montreal and Quebec, in connection with the Labrador iron scheme? Is he aware that it provides an opportunity for making an agreement which would give this country and Canada an equal opportunity for the harmonious and mutual exchange of iron


and other products, and that opportunity would come from investment at this moment, and might be lost forever if not taken advantage of now?

Mr. Macmillan: Yes, Sir. All these things are relevant, and I repeat that the country can invest only what it saves, and that is what we were engaged in debating yesterday.

Hon. Members: Resign.

Stationery Office (Employees)

Mr. Hale: asked the Secretary to the Treasury whether he is aware that a number of employees at Her Majesty's Stationery Office, Chadderton, Lancashire, are under the terms of one agreement deprived of travelling allowances on the ground that Chadderton is in Manchester and under a later agreement are deprived of city rates of pay on the ground that Chadderton is not in Manchester; and whether he will take steps to deal with this anomaly.

The Financial Secretary to the Treasury (Mr. Henry Brooke): I think the hon. Member is misinformed. The officers at Her Majesty's Stationery Office, Chadderton, who were denied travelling allowances when the offices were moved from Manchester to Chadderton have never been deprived of city rates of pay. The second part of the Question does not therefore arise.

Mr. Hale: Is the right hon. Gentleman aware that the pay also includes a travelling allowance, and that these people were deprived of travelling allowance on the ground that Chadderton was still in Manchester? Is he aware that they were then deprived of the cost of living allowance, when that was introduced, on the ground that Chadderton is not still in Manchester? Is he further aware that this sort of "Heads I win, tails you lose" agreement is almost common in a whole series of the Government's activities, and now that the Government have gone into the gambling business and have a reputation to maintain they really cannot go on like this, because punters will not stand for it?

Mr. Brooke: No, Sir. The move from Manchester to Chadderton took place in 1920, and I must ask the hon. Member to accept from me that there are no people who have suffered the dual blow that is alleged in his Question.

Mr. Hale: asked the Secretary to the Treasury the number of civil servants employed by Her Majesty's Stationery Office generally, and particularly at the Chadderton branch, and the number of these, respectively, who are and are not established.

Mr. H. Brooke: Of the 3,044 nonindustrial civil servants employed by Her Majesty's Stationery Office generally, 2,441 are established and 603 unestablished. Of the 401 employed at Chadderton Branch, 308 are established and 93 unestablished.

Mr. Hale: Is not this a very large number of people who are virtually permanent employees, and is it not really the fact that year after year people are being "kidded" that they are to be established and work on year after year until they have to retire on mean and miserable terms?

Mr. Brooke: There have been, and are, extensive arrangements for the establishment of temporary civil servants, and the member of the staff about whom I know the hon. Member has had correspondence actually enjoyed an opportunity of qualifying but, I am sorry to say, he failed to qualify.

Unestablished Civil Servants

22. Mr. Hale: asked the Secretary to the Treasury how many civil servants at the most recent convenient date had served for five years without being established.

Mr. H. Brooke: I estimate that on 31st December, 1955, there were about 45,000 whole-time non-industrial unestablished civil servants with five years' service or more.

Mr. Hale: Is not that an appalling number, and will not the right hon. Gentleman do something about it? However the Government treat Members of Parliament, they might treat civil servants with some consideration and decency, and might try to establish a reputation as decent employers in that connection?

Mr. Brooke: I cannot accept those allegations. Establishment in the Civil Service is a reward for merit, and we cannot compel temporary civil servants to apply for establishment. There is a competition open now for 30,000 clerical


officer posts, but out of 17,000 people who are eligible only 5,500 have applied to go in for it.

Purchase Tax (Overseas Visitors)

24. Mr. Leather: asked the Secretary to the Treasury whether he will consider altering the law relating to Purchase Tax on imports of items brought into the country by overseas visitors solely for the purpose of purchasing British exports.

Mr. H. Brooke: No, Sir. As I explained in reply to my hon. Friend's recent Question about order books, this would be impracticable.

Mr. Leather: Is it not a fact that the Customs and Excise Regulations already allow visitors to bring in, completely free of tax, luxuries such as 28 oz. of liquor and 4 oz. of perfume? Would it not be a good idea to allow them to bring in 4 oz. of order forms to buy British ex ports?

Mr. Brooke: It is perfectly true that passengers are allowed to bring in small quantities of dutiable goods in the luggage which they bring with them, but what my hon. Friend asks for is that there should be a free entry for goods brought in as cargo.

Oral Answers to Questions — HOUSING

Miners, Warwickshire

Mr. Moss: asked the Minister of Housing and Local Government (1) what progress is being made in the provision of houses for miners moving into the Warwickshire coal field; by what local authorities such houses are being provided; and in what numbers in each case; 
(2) what local authorities have been consulted about building houses for miners moving into Warwickshire coal field; what local authorities refused to build such houses; and what reasons they gave for their refusal; 
(3) what request was made to the National Coal Board to assist local authorities to build houses for miners moving into the Warwickshire coal field; and the extent of the asistance asked for and given.

The Minister of Housing and Local Government (Mr. Duncan Sandys): The Councils of Nuneaton, Bedworth Urban

District, Atherstone Rural District, Coventry, Tamworth Rural District and Meriden Rural District have been asked to provide houses for incoming miners. I understand that the first three have refused. Their objections were in part financial and in part based on the view that houses for incoming miners should be provided by the National Coal Board. The last three have agreed in principle to build 160, 100, and 50 houses respectively. The more detailed information asked for should be sought from the National Coal Board.

Gipsies

Mr. Dodds: asked the Minister of Housing and Local Government, in view of the hardship being experienced by many gipsies, because of the increasing difficulties in obtaining suitable camping sites and because of the disparity of treatment being meted out to them in different parts of the country, if he will look into the matter with a view to introducing an enlightened and progressive policy in this minority problem.

The Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. J. Enoch Powell): The problem raised by gipsy camps is largely a local one, and my right hon. Friend is not satisfied that there is any policy which would be applicable universally; but he is prepared to consider particular difficulties which may arise within his sphere of responsibility.

Mr. Dodds: Is not the Minister aware of the serious position that has arisen because of the enforcement of laws which make no allowance for the closing down of traditional gipsy sites? Is he not aware that many of the gipsies would welcome certain aspects of the segregation laws of South Africa? Does he not know by now that the problem cannot be adequately dealt with by local authorities, but only by the Government living up to their responsibilities to this minority, who are a helpless and a harmless group of people?

Mr. Powell: These encampments are very different in the character and in the occupations of their populations, and each case has to be looked at separately. If the hon. Member will refer me to the case which he has in mind, I will certainly look at it.

Mr. Beswick: Is the hon. Gentleman aware that there is a problem here which is beyond the capabilities of local authorities to settle, and whilst I accept my hon. Friend's point that there is a hardship to the gipsies concerned, may I ask whether the Minister is aware that there is equal hardship on the residents who are inflicted with these people at their back gardens? Will the Minister extend the scope of his responsibility in this matter, and see what he can do for them?

Mr. Powell: It may well be a matter which can more easily be dealt with by several local authorities in consultation than by one, but it is still not a matter for which any national policy seems to be applicable.

Mr. Nicholson: Is not my hon. Friend aware that it would be a great tragedy if this historical and picturesque community were squeezed out by the growing pressure of industrialisation and the bureaucratic system?

Mr. Powell: I am too great an admirer of George Borrow not to agree with that.

Mr. Dodds: In view of the unsatisfactory nature of the Answer, I beg to give notice that I shall raise the matter on the Adjournment, after I have raised the matter of white bread.

Birmingham

Mr. D. Howell: asked the Minister of Housing and Local Government whether he has considered the case recently made to him by the Birmingham City Council for a new town to house the homeless of Birmingham; and what action he is taking to deal with the problem of providing housing accommodation for those upon the city housing register and those to be rehoused because of slum clearance in circumstances where no more building land is available within the Birmingham boundaries.

Mr. Sandys: Over the past year I have had discussions with Birmingham Corporation about methods for providing homes and work outside the city for its excess population. At my meeting with it last month, I made it clear that I look to the corporation to initiate precise proposals for dealing with this problem. When I receive these, I shall consider what help I can give.

Mr. Howell: Is the Minister aware that the corporation is having difficulties in making satisfactory arrangements with surrounding county councils? Is he further aware that other large cities are in the same position, and have requested that he and his right hon. Friends concerned should receive a joint deputation? Can he tell us when he is likely to receive this joint deputation from the large cities in respect of the building of new towns?

Mr. Sandys: I am well aware of the difficulties. That is why I have had a number of talks, not only with Birmingham, but with other cities, such as Manchester. I am also, of course, going to receive the deputation mentioned by the hon. Gentleman. What I have suggested is that there should be a preliminary discussion beforehand between the officials of the councils concerned and of my Department to try to clarify the facts upon which our discussion could then usefully be conducted.

Mr. Mitchiion: Does not the right hon. Gentleman think that there is a clear case for one or more new towns around Birmingham, not to say around Manchester? Is that not a matter which is his responsibility, upon which he should take some initiative?

Mr. Sandys: There is a Question dealing with the broad issue of new towns which appears later on the Order Paper. All I would say now is that the creation of a new town is not excluded, but it is only one of the possible methods of dealing with this problem.

Dismantled Prefabricated Houses

Mr. Collins: asked the Minister of Housing and Local Government if he will draw the attention of rural authorities to the fact that dismantled prefabricated houses can be purchased at low cost, and give such authorities assistance and advice in utilising such prefabricated houses, under suitable conditions, in the provision of permanent houses.

Mr. Sandys: I have not received proposals from any local authorities to buy and re-erect dismantled prefabricated houses in their areas.

Mr. Collins: Is the Minister aware that most dismantled "prefabs" are exported, because, out of the 2,000 inquiries from home buyers which arise


every year, there are very few sales owing to difficulties of planning and other difficulties? Will he not, therefore, use his efforts, in view of the impending standstill of local authority building apart from slum clearance, to ensure that these dwellings are used to the best advantage for people at home who need houses?

Mr. Sandys: I cannot at all accept the hon. Member's suggestion that there is a standstill in local authority building apart from slum clearance. Leaving that controversial party point aside, may I say that most of these temporary houses are, of course, still structurally sound, but they are on the small side for normal family life. On the other hand, I think that they might be very useful for the housing of old people, and I propose to look into this as part of the review which I am now conducting into the whole problem of the housing of elderly people.

Displaced Workers (Rehousing)

Mrs. L. Jeger: asked the Minister of Housing and Local Government what proposals he has for the rehousing of workers who, owing to unemployment, have to leave their homes to seek jobs elsewhere.

Mr. Sandys: I would refer the hon. Member to the reply given to the hon. Member for Islington, South-West (Mr. A. Evans) on 12th June, 1956.

Mrs. Jeger: Is the right hon. Gentleman aware that the Minister of Labour is busy encouraging unemployed workers to move elsewhere in their search for jobs, but that the most immobilising factor in the situation is the difficulty of finding housing accommodation in the new area? How can the Government expect workers who have waited for years and years and have at last got a council house under one local authority to give it up to go to another district and search for work?

Mr. Sandys: The best method is to build a lot of houses.

Mrs. Jeger: Is the right hon. Gentleman not aware that the Government's present policy of reducing the amount of house building for general needs is acting to the disadvantage of workers who have to move?

Mr. Sandys: I expect that this year we shall build more local authority houses than were built in almost any year under the Labour Government.

Soviet Building Methods

Mr. MacColl: asked the Minister of Housing and Local Government whether he will make a statement about the technical advances he observed in Soviet building and, in particular, their methods of covering pipes to prevent freezing which might serve to assist in regard to technical problems in this country.

Mr. Hunter: asked the Minister of Housing and Local Government whether, when on his recent visit to the Union of Soviet Socialist Republics to investigate methods of housing construction, he noticed new technical methods of housing construction that could be used with advantage in this country; and if he will make a statement.

Mr. Sandys: I would refer the hon. Members to the reply which I gave to the hon. Member for West Ham, North (Mr. Lewis) on 13th June.
In my study of the problem of frozen pipes I am considering building practices in the Soviet Union as well as in other countries. However, in Russia the severe climate makes it necessary to take precautions which would be unnecessary and uneconomic in this country.

Mr. MacColl: Is the right hon. Gentleman aware that he was quoted in the Manchester Guardian as saying that these methods would be of great value in this country, and that this has aroused widespread interest among people concerned in this work? They are hoping that he will share his knowledge with them.

Oral Answers to Questions — LOCAL GOVERNMENT

Contracts (Fixed-Price Basis)

Mr. R. Bell: asked the Minister of Housing and Local Government whether he will send a circular to local authorities advising them against making contracts containing escalator clauses; and what negotiations he has had upon this subject with local authority associations or builders' organisations.

Mr. Sandys: My right hon. Friend, the Minister of Works is inviting tenders for contracts on a fixed-price basis. In the


light of the results, I shall decide what advice to give to local authorities on this subject.

Mr. Bell: Will my right hon. Friend bear in mind the part which the contracts with escalator clauses play in stimulating and perpetuating inflation, and will he do his best to get this post-war development abolished as soon as possible?

Mr. Sandys: There is no need to convince me of the advantage of fixed prices for contracts. The trouble is that, with fixed-price contracts, under present conditions, the fixed price tends to include an unduly high element to cover the possibility of rising costs. That is, of course, one of the evils of inflation.

Rating Valuation (Compounding Allowance)

Mr. Simmons: asked the Minister of Housing and Local Government if he is aware of the anomalies created by the relationship of the 15 per cent. compounding allowance, as prescribed by the Local Government Act, 1948, to the new higher assessments under the latest revaluation; and if he will consider making some adjustment in the direction of equity.

Mr. Powell: My right hon. Friend is not aware of any anomalies which it is not within the power of local authorities generally to overcome, but if the hon. Member will let him have particulars of any that he has in mind my right hon. Friend will gladly consider them.

Mr. Simmons: Is the Minister aware that a constituent of mine had his assessment raised by 166 per cent. but his compounding limit was raised by only 38 per cent.? Since the compounding limit is governed by an Act of Parliament, will the Minister look at the matter?

Mr. Powell: A house which was subject to compounding before the new valuation lists came into force is still so subject by reason of the Act of 1955.

Water Supply, Radcliffe

Mr. J. Johnson: asked the Minister of Housing and Local Government what schemes have been proposed to his Department regarding water supply and a sewerage system for the village of Radcliffe, Northumberland; and what action he is taking in this matter.

Mr. Powell: A water supply scheme submitted by the adjoining Urban District of Amble includes a proposal for supplying the village of Radcliffe. My right hon. Friend has asked the council for further information. When this is received, a detailed investigation will be made. No proposal for a sewerage scheme for Radcliffe is before him.

Mr. Johnson: While thanking the Minister for that reply, may I ask him whether he agrees that it would be a scandal for a village like this, with hundreds of miners' families, containing chapels, schools, co-op stores, a bus service and the like, to be allowed to decay? Further, would not it be more scandalous still if those people were moved, like the Poles, as I understand they are to be, to the adjoining town of Amble, when they live in the village, were born there, and many of them hope to live there until they die?

Mr. Powell: The hon. Gentleman has raised matters in his supplementary question quite different from those in the main Question. As I have said, my right hon. Friend is waiting to investigate the details of the water scheme.

Rate-borne Expenditure (Value)

Mr. Braine: asked the Minister of Housing and Local Government the average value of all rate-borne services per dwelling-house in county boroughs and county districts in England and Wales.

Mr. Sandys: For 1953–54—the latest year for which complete figures are available—the average rate-borne expenditure per dwelling-house was about £31 10s. in county boroughs and £26 in county districts.

New Petrol Filling Stations

Mr. Hurd: asked the Minister of Housing and Local Government (1) what guidance he has given in terms of the Town and Country Planning Acts to local planning authorities in the giving of their consent to the building of new petrol filling stations;
(2) how many consents under the Town and Country Planning Act were granted in the past year for the building of new petrol filling stations;
(3) in how many cases in the past year he has allowed, and in how many cases disallowed, appeals from the decisions of local planning authorities on the siting of petrol filling stations.

Mr. Sandys: So far, no formal guidance has been given to local planning authorities on this subject. I do not know how many consents were granted by local planning authorities. In the 12 months ended 31st March last, 61 appeals were allowed and 151 dismissed.

Mr. Hurd: Does my right hon. Friend find that there is a wide divergence in the practice of local planning authorities? Has he noticed that the rash of new petrol stations is more obvious in some districts than in others, and will he have another look at the whole problem?

Mr. Sandys: I think that there has been, perhaps, a keener competition between petrol firms lately, and I will certainly consider whether it would be useful and appropriate for me to give some guidance on this matter.

River Thames (Pollution)

Mr. Dodds: asked the Minister of Housing and Local Government what progress has been made in dealing with the stench arising from the pollution of the River Thames.

Mr. Powell: I would refer the hon. Member to my full letter to him on this subject dated 11th April, 1956.

Mr. Dodds: Is the hon. Gentleman aware that many people who are deeply affected by this problem are very grateful for the excellent work being carried out by the Water Pollution Research Laboratory at Stevenage, under Dr. Southgate, and also by the Pippard Committee, and that they are hoping that when researches have shown what is really wrong, the job of putting it right will not be delayed?

Middlesex Development Plan

Mr. Ian Harvey: asked the Minister of Housing and Local Government whether he is now in a position to make a statement with regard to the Middlesex Development Plan.

Mr. Sandys: Subject to certain modifications, I have now approved the County of Middlesex Development Plan.

Mr. Harvey: Is my right hon. Friend aware that his reply will give great satisfaction to the authorities concerned, and that the care with which he has examined these proposals is much appreciated?

Mr. Sandys: I am only sorry that they have had to wait so long for this satisfaction.

New Towns

Mr. MacColl: asked the Minister of Housing and Local Government whether, in view of the financial difficulties in developing expanded towns, he will designate further sites for new towns.

Mr. Sandys: Not at present.

Mr. MacColl: Is the right hon. Gentleman aware that the leader of the Conservative Party in the London County Council has called for a large expansion in the new towns programme as the only way of dealing with the overspill problem of London? Will not the Minister take advice from such a knowledgeable quarter and learn something about the job?

Mr. Sandys: If the hon. Member had been listening to an earlier Question he would have heard reference made to a deputation which I am shortly to receive upon this subject, and which includes representatives from the London County Council.

Mr. Lindgren: Seeing that it was possible, with all the difficulties of post-war development, for 14 new towns to be started between 1946 and 1950, how can the Government explain the fact that since 1951 they have not started a single new town?

Mr. Sandys: If fewer new towns had been started earlier there would have been a bigger case for starting mare now.

Cornish Coastal Footpaths

Mr. Hayman: asked the Minister of Housing and Local Government what mileage of the north and south Cornish coastal footpaths, respectively, is now available for public use; what mileage in each case remains to be secured; and when the whole is expected to become available.

Mr. Powell: Public rights of way exist over 98 miles of the north coast route and 92 of the south coast route; they


remain to be created over 37 and 41 miles respectively. Both routes are for the most part open to the public, even where no legal rights yet exist. The local authorities are negotiating with the many land owners concerned, and I cannot say when the negotiations will be concluded.

Mr. Hayman: Is the Parliamentary Secretary aware that the sixth Annual Report of the National Parks Commission, for the year ended 30th September, 1955, states that:
During the year little progress has been made"?
Will the Parliamentary Secretary do what he can to stimulate those concerned to get the job done quickly?

Mr. Powell: Local authorities are aware of the importance of this matter, but even on a short length of path a number of agreements very often have to be negotiated, and that necessarily takes time.

Mr. Stokes: Is not it a fact that neither private owner nor public authority has any legal sanction to stop people walking round their own coast? Is that not so? If so, why does this situation arise at all? Is it not because some people have infringed the rights of the rest?

Mr. Powell: Then it is very curious that a provision to that effect was made by the Labour Government in the 1949 Act.

NUCLEAR WEAPON TESTS

Mr. Swingler: asked the Prime Minister if he will now propose to President Eisenhower, Marshal Bulganin, and M. Mollet that the Anglo-French proposals for the limitation and eventual abolition of hydrogen bomb tests should be immediately discussed by representatives of the great Powers.

The Prime Minister (Sir Anthony Eden): As I have already informed the House, the Anglo-French proposals for the limitation and eventual abolition of nuclear weapons tests, which cover hydrogen bombs as well as other types of nuclear weapons, will no doubt be considered in the Disarmament Commission which is due to meet at the United Nations Headquarters early next month.

As I said on 7th June, the Disarmament Commission seems to me to be the best place to discuss this business.

Mr. Swingler: Is the Prime Minister not aware that a special initiative to bring these tests under international control would be almost universally welcomed? Is not this a special matter, upon which international control might be swiftly established, thereby avoiding the colossal wastage and potential dangers of further tests? Will not the Prime Minister therefore treat this question as one requiring special initiative?

The Prime Minister: It is—and that is why we put forward our Anglo-French proposals. I agree with the hon. Member to that extent. On the other hand, the Commission which is to discuss this matter early next month is a very representative one, including all the main Powers concerned with these weapons, and I really think that we should give them a chance to do it. I doubt whether any special initiative would produce results.

Mr. Gaitskell: I am not in disagreement with the Prime Minister in regard to his proposal that this matter should be discussed by the Disarmament Commission, but his phrase that it "will no doubt be discussed" suggests that there is some doubt about the matter. Will he make plain that the British Government will propose that it should be discussed by the Disarmament Commission?

The Prime Minister: I am obliged to the right hon. Gentleman for drawing my attention to that. I put in those words because it does not lie with us to tell the other members what to do. We are, in fact, proposing that it should be discussed.

HOUSING AND FACTORY DEVELOPMENT

Mr. Woodburn: asked the Prime Minister whether he will institute a survey to prepare estimates of the probable housing and factory development in coming years with the consequently increasing demands for electricity, water and other services and to ensure that these are foreseen and provided for in step with demand.

The Prime Minister: I have considered the right hon. Gentleman's suggestion. However, it is the practice for the authorities responsible for providing these services to make their own estimates; and I do not think that a separate survey of the kind proposed by the right hon. Gentleman would be helpful.

Mr. Woodburn: Is the Prime Minister aware that civil engineers who have been studying this matter are apprehensive about future prospects unless water is saved by re-use in industry and not allowed to run to waste as fresh water? There is a great danger that if provision is not made in time a drought may bring disaster upon certain of our industries and our agriculture.

The Prime Minister: I am quite ready to receive any representations which the right hon. Gentleman has to make. I have made inquiries, and I am told that in Scotland—which I understand he has particularly in mind—all the water undertakings are local authorities or combinations of local authorities, and we must presume that they are aware of the implications of the proposals for development in their areas.

WAGES, DIVIDENDS AND PRICES

Mr. Osborne: asked the Prime Minister if, in view of the fact that the nation is living beyond its means, and is consuming more than it is producing and thereby causing inflation and making the export of our manufactures more difficult, he will introduce legislation to prohibit any increase in wages and salaries except for longer hours and/or greater production, the increase in any dividends, and the issue of any bonus shares, and instruct the Ministers concerned that there shall be no increase in welfare service payments, until such time as price stability has been achieved, and our exports, including invisibles, are sufficient to pay for our imports.

Mr. H. Wilson: asked the Prime Minister what advice he gave to employers' representatives when he met them recently on the attitude they should adopt to present and future wage claims.

Mr. Gibson: asked the Prime Minister if, in the course of the present discussions with the leaders of trades unions,

nationalised industries and private employers, he will seek agreement on limitation or reduction of dividends and price stabilisation, in the same way as the Government have already sought agreement on wage restraint.

The Prime Minister: As I explained in my Answer to my hon. Friend the Member for Kidderminster (Mr. Nabarro) on 27th March, the object of our talks has been to review the national economy and to emphasise the need to keep down prices. We have not sought to make formal arrangements or to obtain formal assurances, and we do not contemplate legislation. In all our discussions with employers and the leaders of the trade unions, we have been primarily concerned to put before the parties any information at our command and to discuss with them our view and theirs of the national interest.

Mr. Osborne: In view of the fact that all sections of the community would benefit from price stability, does not my right hon. Friend think that leaders on both sides of industry would accept legislation to ensure that—even if it meant a temporary sacrifice on the part of the whole community?

The Prime Minister: In a free society, I do not think that the fixing of prices and wages by legislation is the right solution. We have tried to put our view of the national interest before those whom we have met—and, I think, with some results. I believe that the right way to proceed is by agreement and discussion.

Mr. Wilson: But the Prime Minister has not begun to answer Question No. 48, which he said he was answering. Will he say whether—as is widely believed in the country, and widely reported in the Press —one purpose of this meeting was to advise private employers not to accept proposals for increased wages? Will the right hon. Gentleman and his Government keep absolutely clear of any proposals which are likely to lead to widespread industrial strife?

The Prime Minister: The right hon. Gentleman will no doubt have read the statement which was issued after our discussion. It represents the discussion with the employers. The other statements about the discussions with other branches of industry represent those discussions.

Mr. Gibson: Does the right hon. Gentleman realise that it is quite unreasonable to expect trade unions to accept this rather vague attempt to tackle the problem unless he makes positive suggestions for controlling dividends and prices? If he does not do that, how can he expect millions of people, who see their cost of living rising, to decide not to press for more wages?

The Prime Minister: I think that the majority of the House will agree that this is not a matter which can be handled by legislation, and if it is not to be handled by legislation it must be handled by discussion and agreement with those principally concerned. That is what we have been trying to do, not, I think, entirely without some measure of success. Anyway, that is the way one works in a free society, and that is the way we are going on.

Mr. Wilson: In view of the widespread public interest in this matter and the great economic importance of it, will the right hon. Gentleman not say whether he did give any advice to the employers about wage claims, and, if so, what advice?

The Prime Minister: I am certainly not going at all beyond the public statement which was made, which dealt fully and fairly with our discussions with the employers, or beyond the other statements about the discussions whether with trade unions or employers. They were full statements. If anybody chooses to put a gloss on them, that is his business. I stand by the public statements.

Mr. Gaitskell: Are we, therefore, to assume from the Prime Minister's reply that these discussions will continue, and that, in effect, the Government are now conducting a series of negotiations with both sides of industry? If so, would the Prime Minister give some indication to the House of the proposals which it is suggested the Government should put forward in this matter?

The Prime Minister: I have said, and I think the right hon. Gentleman knows, that we have had a series of discussions with both sides of industry and the nationalised industries. These will continue. I think they have already brought some benefit in an understanding of the importance of stabilising prices. I said to the right hon. Gentleman the Member

for Huyton (Mr. H. Wilson) only that the statements in respect of those discussions have been full and fair, and agreed to by both sides, and I must ask the House to accept their sincerity as statements of what occurred.

Several Hon. Members: rose—

Mr. Speaker: Order. It is past half past three o'clock.

OUTDOOR ADVERTISEMENTS (CONTROL)

The following Question stood upon the Order Paper:

55. Mr. SMITHERS: To ask the Minister of Housing and Local Government whether he will send a circular to local authorities encouraging them to make fuller use of their powers to eliminate advertisements which mar the appearance of towns and countryside.

Mr. Sandys: I will, with your permission, Mr. Speaker, answer Question No. 55. I have been considering whether sufficient action is being taken to protect the beauties and amenities of our countryside and towns from being spoilt by unsightly outdoor advertisements. Thanks to the co-operation of all concerned, an appreciable improvement has been evident in recent years. However, I am sure that much more could and should be done to secure the removal of incongruous hoardings and signs. I have particularly in mind the rural areas and country towns, as well as streets of special architectural interest or civic importance in the cities.
Local planning authorities already possess the necessary powers under the Advertisement Control Regulations and, with some further encouragement from the Government, most of them would, I believe, be glad to make fuller use of them. At the same time, there may be a case for relaxing somewhat the present detailed control in certain localities, where a concentrated display of advertisements is unobjectionable.
I intend, as soon as possible, to issue further guidance to planning authorities on this whole problem, but, before doing so, I propose to have consultations with the local authority associations and representatives of the advertising trade and other interests concerned.

Mr. Smithers: Is my right hon. Friend aware that all dwellers in rural areas and ancient cities, and all those who visit them for pleasure or for business, will welcome his statement? Is he further aware that if in our crowded island the people are to be able to enjoy all the amenities of our country much more vigorous exercise of these powers is necessary?

Mr. Sandys: I agree with my hon. Friend. The beauties of England belong to all, and nobody has a right to destroy them.

Mr. Beswick: While agreeing with the general spirit of what the Minister has just said, may I ask whether he can make some special arrangements under which we can retain for historical purposes those hoardings on which it was said that the Tories would mend the hole in the housewives' purse?

Mr. Sandys: I dare say that could be arranged, on condition of fair shares with some of the posters put up by the party opposite.

Sir V. Raikes: Will my right hon. Friend bear in mind that there are a number of dreary streets where tasteful advertising can somewhat brighten the prospect, and also that the advertising of industrial products is still of considerable importance to the trade of this country?

Mr. Sandys: I can assure my hon. Friend that all relevant considerations will be borne in mind.

Mr. Chapman: Will the right hon. Gentleman try to make sure that when the new motorways are built there will be, as far as possible, prohibition of roadside advertising, for that would be an enormous advance, such as is being made on the Continent?

Mr. Fell: Is my right hon. Friend aware that the people of the rural districts of Norfolk will be delighted to hear that the attentions of his Ministry are to be confined—more or less confined, I hope —to cities rather than the rural areas— [HON. MEMBERS: "No, the other way round."]—as my right hon. Friend has just said, where there has been the utmost nonsense going on ever since the Act was passed?

Mr. Sandys: What does my hon. Friend mean? He evidently has not understood the Answer which I gave, which is that the attentions of my Ministry will, in the first place, be directed to securing the removal of unsightly hoardings in the rural areas.

Mr. Fell: Will my right hon. Friend look up the correspondence which has taken place about, for instance, the moving under the Act of a clock six inches downwards because it was said to be six inches too high, and all that sort of nonsense which has gone on?

QUESTIONS TO MINISTERS

Mr. Rankin: On a point of order. May I ask your guidance, Mr. Speaker, on a matter about which I have written to you? Yesterday, I had down a Question to the Minister of Agriculture, Fisheries and Food. Before the sitting of the House commenced I asked, by telephone from London Airport, for that Question to be deferred. Later, I discovered that, despite my request, the Minister had answered the Question. I think that you should offer some guidance in a circumstance like that, Sir, because it seems to me to ignore the ordinary procedure of the House, and the right of a Member to defer a Question to another day. Perhaps you may be able to tell me what happened, and what steps you propose to take to protect the interests of Members in these matters?

Mr. Speaker: The hon. Member communicated with the office at 2.20 yesterday, according to his own letter, asking that his Question be deferred. I was duly given notice of the hon. Member's desire, and I should not have called the Question. That is as far as I can go in the matter. The Minister had prepared an Answer to the hon. Member's Question, along with two others. Perhaps he did not know anything about the hon. Member's request. He gave the Answer, as he was quite entitled to do. If an hon. Member wishes a Question to be deferred, and gives notice, I shall not call the Question, in deference to the hon. Member's wishes, but that is all I can do in the matter. If hon. Members wish to take further steps with the Minister, that is a matter between them and him.

Mr. Rankin: It seems that there is no further step that I can take in the matter, other than raising it here and now, but surely when notice of deferment is given it is the Minister's business not to include the Answer to that Question in a reply?

Mr. Speaker: That is a matter between an hon. Member and the Minister. I do not know whether the hon. Member gave notice to the Minister. Even if he did, it is a matter entirely between the two of them. He must have that quarrel out with the Minister. I must say that I think that this is a little extraordinary. I usually get complaints from hon. Members that Ministers have not answered their Questions. It is rather unusual to have complaints the other way round.

BILL PRESENTED

BRITISH CARIBBEAN FEDERATION

Bill to provide for the federation of certain West Indian colonies and for the transfer, to a court established for the purposes of the federation, of the jurisdiction of the Court of Appeal established by the West Indian Court of Appeal Act, 1919, and the dissolution of that Court; to provide for conferring on the first-mentioned court jurisdiction to hear and determine appeals from the courts of colonies which are not for the time being included in the federation and to repeal the British Honduras (Court of Appeal) Act, 1881; and for the purposes connected with the matters aforesaid, presented by Mr. Lennox-Boyd; supported

by Mr. Hare and Mr. H. Brooke; read the First time; to be read a Second time Tomorrow and to be printed. [Bill 151.]

FORTH BRIDGE

Mr. Woodburn: On a point of order. I understand that the Secretary of State for Scotland announced in the Press that he was to make a statement in answer to a Question about the Forth Bridge by the hon. and gallant Member for Perth and East Perthshire (Colonel Sir A. Gomme-Duncan). Have you received any request of that kind, Mr. Speaker?

Mr. Speaker: I have received no such request. The Clerk will now proceed to read the Orders of the day.

Mr. G. M. Thomson: I must apologise. Mr. Speaker. It took me a moment to realise what answer you were making to my right hon. Friend the Member for East Stirlingshire (Mr. Woodburn). As I understand, the Secretary of State for Scotland has made a statement in the Press about this matter, which is of very great importance to Scotland. I submit to you, with respect, Sir, that it is not in keeping with the dignity of the House that he should not now make a statement to the House.

Mr. Speaker: That has nothing to do with me. I have nothing to do with what appears in the Press. I have to deal only with requests made to me. No such request has been made to me and, therefore, the matter cannot now be discussed

Orders of the Day — FINANCE (No. 2) BILL

Considered in Committee [Progress, 18th June.]

[Sir CHARLES MACANDREW in the Chair]

The Chairman: The first new Clause on the Order Paper, entitled "Entertainments duty", in the name of the hon. Member for Nottingham, West (Sir T. O'Brien) is not in order. Mr. Leather.

New Clause. (OVERSEAS TAX HOLIDAYS.)

If Her Majesty, by Order in Council, declares that arrangements specified in the order have been made with the Government of any territory outside the United Kingdom being a member of the British Commonwealth and Empire with a view to affording relief from the United Kingdom tax on income which has been relieved from tax payable under the laws of the territory concerned by specified concessions, the arrangements shall, notwithstanding anything in any enactment, have effect in relation to income tax and profits tax, in so far as they provide for relief from United Kingdom tax.—[Mr. Leather.]

Brought up, and read the First time.

3.43 p.m.

Mr. E. H. C. Leather: (Somerset, North): I beg to move, That the Clause be read a Second time.

The Chairman: I think it would be for the convenience of the Committee if we discussed with this new Clause the proposed new Clause in the name of the right hon. and learned Member for Kensington, South (Sir P. Spens), "Income tax exemptions for overseas trade corporations", and the proposed new Clause in the name of the right hon. Member for Huyton (Mr. H. Wilson), "Pioneer industries concession relief". We can discuss all three Clauses and when we get to the last two the Committee may have Divisions on them if it so wishes.

Mr. George Jeger: Do I understand that the first new Clause on the Notice Paper in the name of my hon. Friend the Member for Nottingham, West (Sir T. O'Brien) is out of order and is not being called?

The Chairman: Yes, it is out of order.

Mr. Leather: The Clause I have moved and the other two Clauses cover virtually the same field and I am sure that

there will be very little difference of opinion about the merits of any one of them on either side of the Committee. The point at issue is one which, while it has not been discussed in this Committee since 1953, has exercised a good many hon. Members almost continuously for the past five years.
It is that many of our Colonial Territories, although some foreign countries are also involved, but in particular, the underdeveloped territories of the Commonwealth, recognising the great need for capital and new industry, offer very considerable tax incentives to industries to establish factories, mines, farms and so on, so as to help raise the standard of living and employ the people there. As a result of the position of the tax law of this country at present, all these incentives of various kinds which have been introduced over the years since the war by many colonial countries are completely nullified for any businessman in this country.
3.45 p.m.
There are many different systems. The Chancellor of the Exchequer is in a better position than any of us to judge the exact wording and the modifications required in the law, but I am sure he will agree that we are interested in debating a principle and not in debating a particular technical application of it. Some territories have offered tax holidays for as long as five and even seven years. The Governments of Jamaica and Trinidad, for example, have said "We want industrialists from any part of the world to bring capital into our country where we are suffering from chronic unemployment. so that the standards of living here may be raised, and we are ready to give generous tax incentives to encourage such industrialists "In one case there is a complete tax holiday for five years it those concerned can qualify under a pioneer industry law. There has been no doubt whatsoever in the minds of the Governments of the Caribbean, both past and present, that this is eminently to be desired. The present Government of Jamaica have recently extended the benefits of incentives considerably.
My proposed new Clause refers to the whole of the Commonwealth. Some of my hon. Friends have asked that it should be adjusted to cover dependent territories in the Commonwealth only, and I think that that is virtually the effect of the new


Clause proposed by right hon. and hon. Members opposite. There is yet another Clause in the name of my right hon. and learned Friend the Member for Kensington, South (Sir P. Spens) which suggests that this provision should be world-wide.
I know that I am speaking for many of my hon. Friends, with whom I have worked on this matter for some years, when I say that we do not mind which scheme or Clause the Chancellor accepts, but we are most vitally concerned with the Colonial Territories. We are not concerned with the pure theory or equity of tax law, with which the Royal Commission on the Taxation of Profits and Income was concerned, but rather with the responsibilities of the House of Commons towards our Colonial Territories. I hope that the Chancellor will deal with the matter on that issue. We are trying to press upon my right hon. Friend the responsibility of the House of Commons and the obligation which rests upon all of us to do everything in our power to assist in the development of our dependent territories.
This issue has been argued since 1952. In 1953, the then Chancellor of the Exchequer referred it to the Royal Commission as a matter of urgency. The Royal Commission of 1953 produced an interim Report in which it agreed that the state of our tax laws was "doing damage" to colonial development, and it suggested that "urgent action" should be taken.
That was in 1953. We are now in 1956 and still nothing has been done. The damage is greater and the need is more urgent. I would refer my right hon. Friend to one industrial development which I saw only a few weeks ago in one of the Caribbean Islands. There were no fewer than 19 factories going up on an estate. Seven nations were represented, only one factory was British. There were Canadian, American, French, Italian and German.
This may be looked at in two ways. It may be argued from our own purely selfish point of view that this is a bad thing for British exports and British industry; that we are allowing our foreign competitors to get a foothold right on the ground in Commonwealth Territories. It may be argued from the equally valid, broader point of view, that this indicates that Britain is not doing her duty by her

Colonial Territories, that we are not making the contribution to the development of those territories which we should.
The reason for this in many cases is purely because of this tax disincentive. A Colonial Territory says to the industrialist, "Come and put up your plant here. We will give you a special rate of Profits Tax or Income Tax to offset the risk you are taking and to encourage you to come and help to develop our country" The British Treasury promptly says, "Oh, no, you don't. Every single farthing which the Colonial Territory gives you we will take away from you" That is what the Treasury has been doing. Apparently it does not seem to be the slightest bit interested in helping to develop the Colonial Territories.
Yet there are many of us who are desperately interested. Speaking for the party on this side of the Committee, I have always believed that if we are not a Commonwealth party we are nothing. The Conservative Commonwealth Council, as my right hon. Friend knows well, produced a strongly worded resolution on this subject which was sent to him only a month ago. It is not even that our Treasury and our tax law is neutral; it is operating as a positive disincentive. The tax law is worded and framed and administered in such a way as not merely to allow a fifty-fifty chance but to act as a positive disincentive to persuade anyone not to take a chance. I am sure that many of my hon. Friends can give instances of this, because I am not exaggerating the extent of the disincentive. In 1953, the Royal Commission on Profits, Taxation and Income said that it was causing "damage". I have no doubt, and neither have any of the colonial Governments, that the damage is increasing and that resentment is building up.
It builds up particularly in territories such as Jamaica and Trinidad—Trinidad is a very good example—in the Gold Coast, and in various other parts, where the local Governments say, "We voluntarily surrender tax to help industrialists to develop our country, and it goes to the benefit of the British Treasury". All of them feel that it is an unfair way to run things. I believe that my right hon. Friend will be aware that most of us, on this side of the Committee at any rate, and I think the party opposite, also, think that it is unfair.
Why cannot we do anything about it? It was argued by the then Economic Secretary to the Treasury, in 1953, that this was a complex and difficult matter. Yet other countries have found it possible to solve the problem. I know that the methods of solution are different in different countries. I know it may be argued that the American Government are now debating whether they should do this; indeed, that has recently been used as an argument as to why we should not do it. It is argued that it is not true that the American Government give tax incentives to industrialists to go into the Caribbean, that they are only arguing about it now, and that if they do not do it, why should we?
So far as that is a debating point—I put it no higher—it is an academic one, because, under what is known as the inter-American company legislation, American companies already have a great advantage anyway. What the American Government are now talking about is not giving American companies an advantage, but giving them a further advantage than they have already. Furthermore, the American Congress are under no obligation, nor are the American Government, to develop the Colonies of the British Commonwealth. We are. Surely there can be no difference of opinion between any of us on that matter.
How other countries do these things is irrelevant to the issue. Whatever may be argued as to how they do them, the fact remains that at least half a dozen of them do, whereas we are in the anomalous position that the United Kingdom, the only one of the Western industrial countries with a great colonial tradition, with a great mission agreed by every hon. Member of this House, with a very special responsibility to help to develop our Colonies, are the only people who so juggle our tax law that we make it almost impossible. I therefore hope that my right hon. Friend will not use the complexities and difficulties as being a reason for not taking action.
So far as revenue is concerned, that, of course, is anybody's guess. How much would this concession cost? My own guess, with respect, is that within two or three years it would show a profit to the Treasury, because what little we give up would be far more than offset by the new

companies going in which at present are not going in at all. There is no question in my mind—and I am sure that other hon. Members in this Committee can give examples, too—that there are many companies which have surveyed and investigated the matter and have said, "Well, it is just about a deal. We would like to do it, but at our rate of tax it would be completely uneconomic. Of course, if we had the benefit of your West Indian tax laws, it would be quite another matter." I know of at least half a dozen from my own experience in the Caribbean. So far as revenue is concerned, therefore, I do not think that there can be any argument against what we are requesting.
It may be that my right hon. Friend thinks that he needs more time to consider this difficult matter. Could I plead with him that we have been considering it now for five long, weary years? I am sure that there can be nothing on this subject that the Treasury does not know already. I cannot judge, of course, whether all the Treasury knows on the subject has reached my right hon. Friend, but I do not believe, with all respect, that even he, with his vivid mind, can think of anything new on this subject that has not been thrashed over fifty times already in the last five years. Furthermore, everybody who has thrashed it over has come to the same conclusion, that it ought to be done.
The proposed Clause is possibly badly worded. I do not know, because I am not a Parliamentary draftsman. However, it puts forward the principle which we are pleading with my right hon. Friend to accept.
Finally, if my right hon. Friend is moved, for reasons of his own, to accept the general principle of an overseas trade corporation, either now or at some future stage, and if he thinks it would be sound tax law and equity, I should be the last to object. However, that is not the point I am urging this afternoon. Whether that argument is a good one or a bad one, we in the House of Commons are under no obligation to develop the mining industry of Spain or the oil industry of Ecuador.
We are under no obligation to foreign countries. Whether it is a good thing for us to go in and assist their development or not is quite another argument. I am


arguing that the House of Commons is under a great obligation to our Colonial Dependencies, that by a very minor alteration in our tax law we can bring about a situation which all those dependencies badly want; for which they have been pleading with Her Majesty's Government for five weary years; which many of us in the House of Commons have been advocating for five years; which the Royal Commission on Taxation Profits and Income has supported; which meets with virtually universal approval on both sides of this Committee.
We are pleading with my right hon. Friend that he should say now, or during the later stages of our discussions on the Bill, that he will find a method of inserting a Clause to deal with our obligations to our Colonial Territories to adjust this technical imperfection in our tax laws in such a way that British industry can go ahead and make a fuller contribution to the great colonial cause which we all have so much at heart and to which we are all pledged up to the hilt.

4.0 p.m.

Mr. Stan Awbery: Is not the hon. Gentleman losing sight of the fact that poverty does not exist in the Colonies merely because we are not investing sufficient money there? Poverty exists in some Colonies not only because of lack of investment, but because we are taking money from the Colonies. If we did not take so much from Malaya, the standard of living there would be twice as high as at present.

Mr. Leather: That is another argument which I should be happy to pursue with the hon. Gentleman on another occasion. It is not the point I am discussing, and I do not wish to continue my speech longer or to distract from the main argument.
I plead with the Chancellor to deal this afternoon purely with the question of colonial development and our obligations to the Colonies. I ask him to remove this extraordinary anomaly whereby this great colonial Power imposes, for purely technical reasons—not for reasons of principle or revenue—a positive deterrent to British industry playing the part which we all want it to play in colonial development.

Mr. G. R. Mitchison: I listened carefully to the hon. Member for Somerset, North (Mr. Leather) and I found little with which to disagree in what he said. It is perfectly true that this subject has been raised and argued for many years, in one way or another. He took 1952 as the starting date. I think that is about right.
It is true that there is a great injustice in principle here, and I share his hopes that this question will be answered by the Government not on any drafting or detailed point but on the general question of principle which is involved both in his new Clause and in that in the name of my right hon. Friend the Member for Huyton (Mr. H. Wilson). I think that the third new Clause which we are discussing is rather a different proposition. It was so treated by the Royal Commission. It goes further and in a different direction from that which I should think right. But I find no quarrel, except in form and on some minor points, with the new Clause which the hon. Member for Somerset, North has moved.
There are some minor differences. We take the view that we should follow very closely the Royal Commission's recommendations on this occasion and we provide accordingly for a rather narrow Clause—narrow because it is confined to
Colonies and does not include Dominions, narrow because it is confined to Income Tax and does not cover Profits Tax. We did that because we want to get the Government to accept the principle. Let them add Profits Tax, as the hon. Member for Somerset, North did; we certainly shall not complain. What he has done—and I hope he will not mind my saying so—is to take Section 347 of the Income Tax Act, which is the double taxation Section, and adapt it to this case.
My difficulty about his new Clause—and it is not a very serious difficulty—is that in paragraph 58 of the Royal Commission's Report, to which we are both referring, the Commission said it did not want any general statutory provision. Although I agree that his new Clause is not quite a general statutory provision of the type the Commission had in mind, it certainly leaves the matter entirely at large as to what is to be done afterwards in the Orders in Council which he contemplates.
We thought it right to emphasise that what we are concerned with primarily is


the special case of developing enterprises in the Colonies and dependent territories which the Governments of those Colonies and dependent territories themselves think of such a character as to be entitled to special relief. We regard the Clause which we put forward as a means of promoting what has always been very much in the heart and in the forefront of the programme of the Labour Party—the responsibilities which we in this country have towards underdeveloped countries in general and particularly those in the Commonwealth, where we have a special responsibility.
For that reason we have confined ourselves to what I refer to as the Colonies, and the machinery we propose is this: there are, of course, overseas holidays of the type mentioned, and there are other forms of Income Tax concession, and we suggest that it should rest with the United Kingdom Government to describe in general terms the type of concession which will attract this relief. That is, in fact, the suggestion of the Royal Comsion's Report.
I turn for a minute to make perfectly clear what happens at present. A colonial Government, for the reasons I have indicated and being themselves the best judge of what is required in the Colony, give special relief by way of a remission of Income Tax in one form or another. I turn to paragraph 53 of the Royal Commission's Report—its first Report, in February, 1953—and take the following very short statement of what happened. I shall have occasion to differ about only one word.
If a concern qualifying for this relief
—that is, the colonial relief—
is resident in the United Kingdom, the relief is valueless to it because it still bears the full United Kingdom tax. Paradoxically, the benefit of the relief would redound to the United Kingdom Exchequer, which would have that much less double taxation relief to give.
The only word with which I quarrel is "paradoxical". It seems to me to be not unusual Treasury practice, but pushed too far. The weak partner, the one who stands most in need of development and relief, makes a special concession in order to get it. It is valueless from that point of view because the people for whom the concession is made get nothing out of it. Who gets the lot? Answer—the Treasury. And the

Treasury is the stronger partner and the partner which has a special responsibility towards this somewhat undeveloped country.
It is highly significant that today we see sitting in front of us on the Government benches distinguished and competent representatives of the Treasury, but not a single soul do we see from the Colonial Office. If we are to have watertight compartments as tight as that and to consider the whole question of our responsibility to the Colonies from the point of view of the British Treasury, we shall never get anywhere towards discharging it. It is disgraceful, as a matter of Government machinery, that no one should be here who has a direct responsibility towards the Colonies. No doubt the Chancellor has a collective Cabinet responsibility, but I have a suspicion that this is the Treasury—and I put it quite bluntly—at its most grasping and its most short-sighted.
These are no doubt hard words. They may be easier for the Opposition to say than for hon. Gentlemen opposite, but they are what the Royal Commission said in rather more polite language than I used. It was an impartial and competent body, which had had this question referred to it in 1953 as a matter of urgency.
There is one other point, and this perhaps may give some of the explanation of the Treasury objection. The Commission proposed that when relief of this kind was given it should got go to the Treasury, but to the taxpayer concerned. That is what it comes to. As to the amount of the relief, the Commission made it perfectly clear, as we do in our proposal, that it should only he such relief as was given by the direct operation of the colonial concession, and, further, when that relief was so given, the certificate of the colonial Government as to how much it was should be accepted by the British Treasury.
I suppose the Treasury did not like it, but it is right that that should be done, for, after all, there is no reason at all why, if it has protection in listing the agreements, and protection in making Orders in Council, we should, all over again, go through the process of trying to find out from this end what the result of the direct operation of the concession was at that end.
Therefore, I say to the hon. Member for Somerset, North and his hon. Friends that we listened to him with interest and in very great agreement indeed. Speaking for myself, there was only one point upon which I felt some hesitation. It was whether, if I may put the matter quite bluntly, the hon. Gentleman's legs were as good as his voice: in other words, whether he will go into the Lobby in support of his own proposal. We felt a little hesitation about that.
The hon. Gentleman was amazingly eloquent about it, and he spoke with fervent conviction. Indeed, he reminded me of the last occasion when I met him, when we both appeared in an overseas programme, though he may have forgotten it, because it was so long ago. At any rate, I listened with sympathy and attention to his eloquence, and I trust that he and his hon. Friends will put into deeds what they have so eloquently said in words. We shall do our best to support them, and we would not rest on the distinction which I have indicated between our proposed new Clause, which we would prefer for the reasons I have given, and theirs.
I cannot give quite the same measure of support to whatever the right hon. and learned Member for Kensington, South (Sir P. Spens) may be going to say. I am sure that his eloquence will be great, but the history of his proposed new Clause is a somewhat different one. This was the urgent remedy for a crying scandal. That is really what it was that the Royal Commission first recommended, and it was asked to make recommendations in more general terms. The Commission said, "We will give you a first effort, and will bring forward final recommendations later."
Some time afterwards, in 1955, came its final Report, and in it the Commission devoted a whole chapter of 22 pages—and Royal Commissions write closely—to the question of overseas profits. It produced a recommendation, but it had very great difficulty in doing so. It began with general observations, and then came to the problem ascertained, and when it got to that, it divided the members of the Royal Commission into three classes—those who were for what they were going to propose, those who were against what they were going to propose, and

those who were partly for and partly against what they were going to propose. This was a somewhat discouraging beginning.
The Commission then produced an extremely long discussion of the pros and cons, and what I might call the sideways arguments. I do not venture to trouble the Committee with all that, but the minority Report, which came later, does not agree with it a bit. What we are getting today from the new Clause in the name of the right hon. and learned Gentleman is the majority Report, adapted, as I see it, to meet some of the difficulties which the majority stated themselves and some of the objections which were taken by the minority.
4.15 p.m.
It really covers a far wider field than anything that is in the other two new Clauses. It is not concerned with limitations with regard to our colonial responsibilities. It might cover, I agree, as the Report said it would, the particular point that we have been talking about in connection with the other two new Clauses, but it would cover an enormous amount of other material, too. I should have thought that the right thing to do at the moment, considering the general financial mess in which the Government have landed us, would be to confine ourselves to the urgent and immediate question of this special relief with regard to Colonies, and that the new Clause about which we shall no doubt hear shortly goes far wide of that.
I think there is no geographical limitation at all, except that it must be an overseas corporation. Without going into it in detail, I believe it would be unworkable, because it depends on a large number of fine distinctions, as was pointed out in both parts of the Royal Commission's Report. Further than that, I believe it would again open the door—I will not
say to schemes designed specially for the purpose of taking advantage of it, because one appreciates that they may be proper schemes—but to schemes which, by their character, would not commend themselves to the Committee in general and would be tailored to meet this rather sweeping provision.
I say no more about it than that at the moment. After all, it is to be dealt with, and we shall all listen with interest to what is said in support of it. My right


hon. and hon. Friends and I feel very strongly indeed with the hon. Member for Somerset, North and his Friends that the question of pioneer tax concessions granted by Colonies and then pinched by the Treasury is a crying scandal, which has gone on much too long. It is high time, for the benefit of our good name and our position in the world with regard to other countries, and also our special responsibilities to the Colonies, that, however much the financial mess may be, that particular matter, at any rate, should be deal with without delay.

Sir Roland Robinson: I rise to support very strongly the new Clause which has been moved by my hon. Friend the Member for Somerset, North (Mr. Leather). I feel that he has done a service to the Committee in bringing before it this important question of colonial development and the overseas tax holiday. I am also pleased that he has been able to attract such powerful support from the other side of the Committee, and I hope that the significance of that will not be lost on the Treasury, for I feel that this is a matter in which, basically, the Committee is united.
We in the Conservative Party feel that we have a duty in the economic development of the Commonwealth and, above all, that of our Colonies. At this time it is right that we should ask ourselves whether we are doing our duty in this matter. There is no question that the events of the past week concerning Trinidad oil have caused a great deal of heart-searching on this subject.
We can truthfully say that the answer is that United Kingdom taxation tends to make it much easier for the foreigner to compete and operate in the Colonies than it is for us. That state of affairs is quite wrong. Oil is not an isolated case. There are many similar things, such as bauxite, in Jamaica and British Guiana, where the main developments are in the hands of the United States and Canada, whose Governments adapt themselves to the local taxation systems and who help their own nationals when they are operating overseas.
I agree that it is the Colonies in particular which need our help, and from the West Indies and Africa we have had this idea of overseas tax holidays. It is impossible for companies domiciled in the United Kingdom to take advantage of

this proposed legislation. There is no doubt that in one way or another other nations have adjusted their tax laws to give their nationals the greatest advantages to be derived in the taxation in our Colonies. We should approach the matter in the same spirit.
It would not be a fair answer to say that this particular method is not used by the American, or any other Government. Other Governments try to help their people in these matters and we, in turn, must help our people. There is no question that the Committee is very interested in the Commonwealth development. I remind the Chancellor of the Exchequer that on the Order Paper there is a Motion on this subject signed by more than 150 Members and which has appeared because all of us feel very strongly about this subject. The Motion reads:
That this House, being of the opinion that the development of raw materials throughout the Commonwealth is vital in assisting the balance of payments and is essential to the prosperity of the United Kingdom and of all other countries within the Commonwealth, urges Her Majesty's Government, by achieving an annual economy in national expenditure to make available an amount equal to five per centum of the annual revenue of the United Kingdom for the exclusive purpose of providing facilities of communication, water and power which are essential to such development.
Both the Commonwealth Relations Office and the Colonial Office are anxious to foster the development of the Colonies and the Commonwealth, and the Treasury should do nothing to nullify that policy. I agree with the hon. and learned Member for Kettering (Mr. Mitchison) that our economy should not appear to be milking the Colonies to fill its own coffers. I remember a practical experience when, a few years ago, I was talking to the colonial treasurer of one of our Colonies about plans for development in his own area. It was a matter in which I was interested and I suggested that, subject to certain tax concessions, we could do certain things. He agreed and said, "We would willingly give you all those concessions if you could keep them, but as your Chancellor of the Exchequer is taking them all from you, we must come first, because, after all, the money is earned in this Colony." He was quite right in that view.
The present system of taxation forms a great disincentive to United Kingdom


developers who wish to play their part in the expansion of Commonwealth resources. This subject affects the Commonwealth as well as the Colonies. It is a great tragedy that we in this country have not been able to play a larger part in the development of vast oil resources in Canada. At the moment a great deal of that is falling into American hands. In the oil industry the United States Government give to their own nationals tax advantages much greater than we give, which is one reason why the Americans can compete with us in oil so successfully.
Another new Clause suggests that this concession should apply to all overseas territories. I must confess that I am not carried that far. It would be a mistake to give these concessions to the rest of the world. We have no obligation to develop the rest of the world, but we have an obligation to those people whom we lead in the British Commonwealth. We should turn our attention to them first and the other problems can well wait. It could be a great disadvantage to industry in this country if British capital were encouraged to go out and support in foreign countries industries which would compete with our own employers and our own labour in this country. We should not go that far, but I whole-heartedly support the idea of giving the concession to the British Commonwealth and Colonies.
I urge on the Chancellor, as did my hon. Friend the Member for Somerset, North, that this is not a new problem in any way. I cannot see that more time to consider it is necessary. It was very fully debated in 1953, and the interim Report of the Royal Commission on the Taxation of Profits and Income covered this among other matters. In the three years which have elapsed since then, the Treasury has had ample time to make up its mind one way or another. I am sure that the Chancellor would not think of telling us that the matter has come as a surprise to the Treasury.
We want some action now. The matter is important and it is not enough that we should make speeches and pass pious resolutions supporting it. The case for the development of our Colonies and Commonwealth demands action now and not merely lip service. It is, from the

point of view of our people and the Commonwealth, more important than ever, in view of what has happened in Trinidad and what may well happen elsewhere. Now is the time for action. This is the time for a great gesture on our part which would give faith and courage to those in the Commonwealth and Colonies who believe in us and accept our leadership.

Mrs. Eirene White: As do my hon. and right hon. Friends, I support the principle behind the new Clause and, naturally, that which is put forward by hon. Members from this side of the Committee. I should say that I have no shares, nor any prospect of a directorship, in any of the companies concerned. I think that some Members have certain interests in this matter, although I am not for one moment suggesting that they are supporting the principle for that reason. It is a principle which should be supported by the Government Front Bench, and I hope that before the debate is concluded we shall have that support.
I am surprised that this provision has not already been included in the Finance Bill. In recent Finance Bills we have dealt with narrower matters, because of the difficulties at home. This was an opportunity for the Chancellor of the Exchequer to show that he had an imaginative touch in this topic. He has dealt with one of the subjects to which the interim Report of the Royal Commission on the Taxation of Profits and Income referred, unremittable profits. Certain provisions for that have been made in the present Bill. This was an occasion on which the Government might have dealt with the other part of the interim Report.
Although hon. Members have referred to 1953, it was in August, 1952, that the former Chancellor of the Exchequer wrote to the Royal Commission and asked it to consider this subject "as a matter of importance and urgency". The Commission did so and its opinion was quite emphatic. As hon. Members have pointed out, we have previously discussed this subject. There is general support for the proposal and I see no reason why the Treasury should not come forward with positive proposals. I recognise that there may be difficulties of detail, but "where


there's a will there's a way" and I give the right hon. Gentleman credit for sufficient ingenuity to find a way round any difficulties which may be occasioned by concessions of this sort.
I do not wish to weary the Committee by again going over the arguments, because we are all seized of them. The only point on which there may be slight difference of opinion is precisely where the line is to be drawn about what type of territory is to be covered. In supporting these new Clauses we are confining ourselves in the Commonwealth, but within the Commonwealth there are so many differences of status among different territories that that might be a point of argument on detail.
4.30 p.m.
What I have particularly in mind is territories such as the Gold Coast and Nigeria, which are now Colonial Territories in the full sense of the word, although they may cease to be so, but will be in great need of the kind of development we are discussing. The same might apply to the Caribbean Federation. To be quite clear on that question, we should have more discussion of it at a later stage. We had the Premier of the Western Region of Nigeria visiting this country recently and he said that he spent only a couple of days in the United Kingdom because it was not worth his while to spend longer here to find investors in Western Nigeria. I am certain that if this proposal had been adopted Mr. Awolowo would have spent a great deal longer here than he did.
This gives the Chancellor an opportunity of doing something which would be of immense benefit and which it is urgent to do. I presume that the Chancellor is paying some attention to the remarks which are being made, but he seems to have been asleep for a great deal of the time. I am deeply disappointed that there is no representative of the Colonial Office present. I think it extremely regrettable that apparently so little importance is attached to this new Clause, which was proposed from the other side of the Committee, that there is no one here from the Colonial Office.
We all know that the Assistant Postmaster-General used to take an interest in these matters, but I can hardly imagine that in his new position he would have

the same direct influence as the Colonial Secretary. It is regrettable that the Government appear to be taking a very half-hearted interest in the question. However, it is still open to the Chancellor to put that right. If he announces that he accepts the new Clause we shall not be too hard on the Colonial Secretary.

Sir Patrick Spens: I wish to start by saying that had I not put a new Clause on the Notice Paper, "Income Tax exemptions for overseas trade corporations", I should have contented myself by supporting everything that had been said in favour of the new Clause we are discussing. I do not intend to repeat the arguments which have been put forward in its favour. As an immediate and attractive measure I believe it would be of very great use and it certainly would carry out our primary obligation of taking some steps to develop our Colonies and Colonial Dependencies.
I want to occupy a very few moments in dealing with the wider Clause in my name. That, as the hon. and learned Member for Kettering (Mr. Mitchison) pointed out, is founded on the Third Report of the Royal Commission. In paragraph 642 of the conclusions of the majority of that Commission, the Report states:
These considerations, taken together, show that the present system of taxing overseas profits is neither fair to the individual trader who makes them nor conducive to the true economic interests of the country as a whole. Some change of the system is urgently required; and the principle that should govern a revised system should be that overseas trading profits should be altogether exempt from United Kingdom taxation so long as they remain at the service of the business in which they are made but that once they are withdrawn from the purpose of the business by any form of distribution to proprietors they should be taxed according to the scheme of taxation of personal incomes and as the personal income of each recipient.
The main reason why those recommendations were made was the fact that the whole of our industrial activities overseas, in the Commonwealth, in the Colonies, in the dependent territories and elsewhere, were and are being slowed up entirely by the Income Tax provisions prevalent in this country. At present, any company which sets out to develop any territory overseas has to bear the full burden of our Income Tax provisions here. That burden is so great that, quite apart from what we have been discussing,


it makes it quite impossible for them to compete successfully in many areas of the world with foreign countries, to whom concessions are given by their Governments.
Some British companies have sought to try to relieve themselves of these difficulties by going overseas, leaving this country altogether and registering themselves overseas, either in the Commonwealth, in the Colonies or even in foreign countries. Thereby this country loses the whole taxation imposed upon them except in so far as individuals receive profits from overseas and become subject to taxation here on receipt of those profits. The inconvenience of going overseas in the last five or six years since the war has proved very great.
Those companies lose particularly resources of technical education and research in this country. They cannot find the young men they want, they are not in touch with suppliers and cannot make contracts so satisfactorily if their headquarters are in Rhodesia, South America, South Africa or Australia as they would if their headquarters were in England. It is universally felt that this method of transferring registration overseas results in many difficulties through leaving the centre of activities in this country. It was very largely because of that and the burden of Income Tax on the British registered company that the Royal Commission, in its Third Report, thought this far and away the worst burden on British industry and made this recommendation.
I go somewhat further than that. My personal inclination, like that of all hon. Members who have spoken so far, is for the development of the Colonies, Dependencies and underdeveloped areas of the world. I am quite convinced that they are not going to be developed adequately, sufficiently fast and sufficiently well, unless British private enterprise plays a very large part in doing that. British private enterprise has developed most of the underdeveloped parts of the world during the last couple of centuries. British private enterprise is required today to develop the remaining underdeveloped territories, as much as when it started 150 years ago. British private enterprise will not be able to do that unless it gets some relief from this burden of taxation.
One knows that a great deal of development can be done by way of loans from governments through banks, and so on, but in any scheme for development of any territory an enormous percentage of effort still has to come from private enterprise of one sort or another. For that development to go on at the rate at which it has to go I cannot believe that it can be effectively done merely through public loans or development corporations. I believe that a very special tax concession has to be given to companies which will go abroad and do this work while still being registered here.
While it is unknown what would be the cost of this concession, if it resulted in a great increase of British industrial activity overseas the profits would come back here, of course, and the Government would get their money eventually. Therefore, although it is impossible to say that what they would lose on the roundabouts they would gain on the swings, one thing is certain, and that is that there are enormous advantages which would come from this concession if it could be made.
I want to say a word about the details of the Clause. It is perfectly true that this Clause has been drafted to try to meet as many objections as possible. I am not a Parliamentary draftsman nowadays—there was perhaps a time when I was, but I am certainly not nowadays. I do not pretend to be the draftsman of it, and there may be drafting errors in the Clause that I have put forward, but we do not want to discuss drafting mistakes. We want to know how far Her Majesty's Government are with us on this great principle and how far they are willing to go in assisting us.
I hope that at least the Government will accept the principle and content of the Clause put forward by my hon. Friend, and that they will consider the great advantages to the whole future industrial activities of this country by giving the most serious consideration to the new Clause which I have tabled.

The Chancellor of the Exchequer (Mr. Harold Macmillan): I think that it might be convenient if I were now to give the view of the Government on the very interesting debate which we have had so far. I think that it has been a convenience to us all to take these three new Clauses together. Although they vary very much


in scope and effect, they at least give us the opportunity, as my hon. Friend has said, to discuss the principle rather than the precise drafting or the exact effects of any of these Clauses as put upon the Paper. As he has said, this is not a new problem. It is, on the other hand, quite a complicated problem and it has taken a good deal of time to consider because it raises very big questions which require careful examination.
On the broadest issue, I think the Committee would agree that this has been, with very few minor deviations, a non-partisan debate. The request that my right hon. Friend the Colonial Secretary should be present at this discussion is the usual one that is put up.

Mr. Mitchison: Disgraceful.

Mr. Macmillan: The right hon. Member knows quite well that Government Departments and Ministers are in close touch with each other, and for him to say that it is disgraceful for the Colonial Secretary not to be here can only show how little experience of actual practice of administration he has had.

Mr. Mitchison: May I confirm the right hon. Gentleman on his last point? I have no practice of administration whatever. May I correct him on one other point? No one has ever been so misguided as to make me a Privy Councillor.

Mr. Macmillan: I hope that that may be rapidly corrected. It would cause very great pleasure to us all. But these are minor points and it is the debate as a whole that is important.
Everyone knows quite well that the Colonial Secretary has a great deal of work to do and it would be very foolish of him to feel compelled to be here today. I have a certain loyalty to my colleagues and I propose to defend them when they are attacked. I know that that is sometimes considered to be rather an unusual thing, but it is a principle to which I hold. Apart from these deviations in partisanship, this has been quite a nonparty debate and, as the hon. and learned Gentleman knows, they have only affected minor individual points.
4.45 p.m.
I must remind the Committee that, broadly speaking, the future of our investments overseas, whether in the Colonies,

in other Commonwealth countries or in any other countries, depends upon the provision of sufficient savings through our own economic efforts to make these investments practicable. That is the fundamental problem and it is one which I think all of us in this Committee, though we may have different points of view, recognise as the biggest problem which confronts us.
Nevertheless, it is perfectly true that the taxation system could be so adjusted and moulded as to assist at a time when it is perhaps particularly difficult to make available savings on a sufficient scale to carry out what is both our duty and in our interest. We have a right to look to the taxation system to be so arranged as to assist in our general purpose.
I would point out to my hon. Friend the Member for Somerset, North (Mr. Leather), who in an admirable speech moved this new Clause, that, quite frankly, I do not think that the Trinidad oil question is very relevant to this Clause. I cannot conceive how this Clause, had it been in existence, could have affected so long established a concern as the Trinidad Oil Company. The new Clause deals with reliefs over a quite short period—I think a five-year period —and therefore could not have been effective in connection with this matter.
I would also point out that it is not the fact, as is sometimes said, that other countries have made wide provisions of this kind. My hon. Friend the Member for Somerset, North quite frankly stated that the United States taxation system was still under discussion, and I do not think it is really the fact that other countries have made a wide series of adjustments which we have not been able to make here.
In these Clauses I am being asked to deal, if I may just summarise the position of the Government, with what is known as "frustration"—I think that is the technical expression—that is to say, "frustration" by the United Kingdom tax system of those pioneer industry reliefs which are given in some countries abroad. It is a very simple problem to state, although not a very easy one to solve. It is perfectly true that a company which is managed and controlled in the United Kingdom is liable to tax in the United Kingdom on the whole of its profits,


wherever those profits are earned, and if it pays overseas tax on profits earned in a particular overseas territory, it is given relief against United Kingdom tax for the overseas tax.
When, as is usually the case, the overseas rate of tax is less than the United Kingdom rate, it therefore bears, in total, tax equal in amount to the United Kingdom tax. But if the overseas territory exempts those overseas profits from tax for a period of years—and this is what I think we are dealing with and why I have referred to these long-established companies as a different problem—or, as is sometimes done, charges them at a specially low rate as an incentive to a company to establish itself or perhaps to extend its activities, then it is quite true that the company derives no benefit from this exemption or reduction.
The overseas territory gives up, as it were, or reduces its tax, but the company has to pay the United Kingdom tax at the full rate on its profits and gets no relief against that tax for the tax "saved" in the overseas territory. Therefore, it is true to say that the United Kingdom Exchequer is the only beneficiary. That has been going on for a very long time under a great number of Administrations. [HON. MEMBERS: "That does not make it right."] I know that does not make it right, but I am trying to explain the situation before I say what I am going to propose. I think it necessary to do that for the record.
The United Kingdom Exchequer is the only beneficiary, in that it does not have to give relief for the overseas tax that would have been charged had there been no pioneer industry relief. Thus the technical phrase is that it is "frustrated" by the United Kingdom tax system, and the desire of overseas Governments—particularly in the Colonies—to foster industrial development is thereby thwarted.
Let us take the history of this. In 1953, the Royal Commission recommended that remedial action should be taken. It was discussed—I am bound to say that I was not present—in the Finance Bill debates of that year. The Government took the view at that time that they would prefer, before dealing with this problem, to await the final Report of the Royal Commission on the general question of the taxation of overseas profits, in other words, on the

problem raised by my right hon. and learned Friend the Member for Kensington, South (Sir P. Spens), before they dealt with the problem raised by my hon. Friend the Member for Somerset, North.
That Report is, of course, available, but I must frankly confess that it contains revolutionary and far-reaching proposals on the taxation of overseas profits; and, of course, in that, as the greater would include the less, the problem of my hon. Friend the Member for Somerset, North, who moved the first Clause, would automatically be solved. The Commission recommended that companies whose trading operations were wholly overseas, to which it gave the name of "overseas trade corporations," should be relieved from Income Tax on their trading profits and that United Kingdom tax should be charged only upon dividends and other distributions made out of those profits. That was a tremendous recommendation. It would then be the case that their undistributed profits would bear only the tax charged by the country in which the company was trading.
I have a great deal of sympathy with this proposal, but I cannot conceal from myself that it is a very big proposal. To alter the tax law in the way proposed by the Commission would require very long and complicated legislation. Nor is that the end of the story. The proposal involves other large questions, wider than the mere taxation problem, which have had to be weighed, most carefully. The cost would be substantial and, I must say frankly, quite out of keeping with the circumstances of the Budget of this year.
My right hon. Friend the Financial Secretary, in answer to a Question in December last, gave as an estimate of the cost of implementing the recommendation a figure as high as £75 million a year. I must ask the Committee to see my difficulties and to appreciate that anything of that order must take its place among other possibilities of making reductions in taxation, or concessions to the public. It is a very big thing. One does not just deal with a £75 million concession in a new Clause on an afternoon at the end of the Finance Bill discussions. It would completely overthrow the whole balance of the Budget. I am not saying that it is wrong in principle, but I am saying that it involves very large issues.


Then I have to look at the background, because not only would it involve very big Budgetary losses, but it would have a very considerable effect on the balance of payments. So we have a double pressure on us I am not making these points as objections, but am stating them as facts. Something involving that amount of money, regarded both from the Budgetary and balance of payments point of view, is not lightly entered into. Therefore, I considered very carefully whether I should put forward in this year's Finance Bill a scheme based on the recommendation of the Royal Commission. Of course, I recognise the force of the arguments deployed by those -embers of the Commission who supported the recommendations. I also recognise, as was said by the hon. and learned Member for Kettering (Mr. Mitchison) that there were different teams on the Commission.
I have great sympathy with the argument in principle, and I take particular account of the importance attached to this scheme by United Kingdom concerns who operate overseas. But I was driven to the conclusion that I could not introduce this year proposals which, whatever their long-term advantage—and I think that the effect might be considerable—would have a very adverse short-term effect both on the Budgetary position and on the balance of payments. I intend, therefore, to consider these proposals in the light of the developing economic circumstances to see whether it may not be possible to introduce legislation in next year's Finance Bill to deal with the large issue raised in the last new Clause, the comprehensive issue raised particularly by my right hon. and learned Friend the Member for Kensington, South.
Of course, I realised that my decision to defer action on the Commission's broader recommendations would lead to pressure, very determined and sincere pressure, for the early implementation of the recommendations on pioneer industry reliefs, and I realised, too, that there was special force in this argument in relation to the Commonwealth and colonial countries. The first Clause is limited to these territories and therefore has a special claim for the reasons which have been very well expressed by my hon. Friends, I think that, in passing, I ought to say that much as I recognise these special claims

—nobody recognises them more—I do not think that we ought to exclude the consideration of other countries; partly in our own interests, because we have great interests in countries other than the Colonial and Commonwealth Territories, and partly because of our duty to the under-developed parts of the world. So I do not think that this is a mutually exclusive consideration, although, of course, we have a natural sense of priority towards our own traditional responsibilities.
I think, therefore, that when we come to deal with the matter we ought to consider, not merely the question of the Commonwealth and Empire, but the wider problem raised by the right hon. and learned Gentleman. It is urged upon me that in the interests of Colonial and Commonwealth development, I should not delay putting into effect the proposal about pioneer industry reliefs until I have finally decided my attitude towards the overseas trade corporations. Of course, I have great sympathy with this point of view and it is true that the pioneer industry concession, the more limited concession, would be much less costly than the other. But I must say, frankly, that it would be extremely difficult, if not impossible, in the short time available to produce a satisfactory Clause for the Report stage. And I must point out that the connection between the two reliefs remains.
This is as far as I can go, but I will add this. If in next year's Budget the Government should be able to introduce reliefs for overseas trade corporations generally, then, of course, the bigger question would settle the smaller one. If, however, circumstances are such, either from the Budgetary or the balance of payments point of view, that I cannot go the whole way—I may be able to do so—but if I cannot go the whole way and deal with the wider questions raised by my right hon. and learned Friend, I will give this assurance; I will bring forward legislation next year to deal with the matter of the frustration of pioneer industry reliefs, and I will make it apply to profits earned after 6th April, 1956. In other words, I could hardly do more if I were introducing legislation this year. I cannot draft a Clause now—it is a very complicated matter—but I will give this undertaking. Either I will deal with the larger question—if, as I hope,


the Budgetary and balance of payments situation allows it—or, at any rate, I will deal with the smaller question and date it back to April of this year. I hope, therefore, that hon. Members will feel that in the situation we have done the best we can to meet a view which is equally felt on both sides of the Committee.
5.0 p.m.
I am not without hope that we can deal with the larger question. I honestly think that it is very much in our interests, as well as our duty, to deal with countries other than those in the smaller field, large as it is, of the Commonwealth and Colonies. There are great interests which it is very much our interest to promote. If, however, we cannot do that—I am making no pledge—I will take the step which will have the same effect as if we had been able to meet the smaller question this year. I hope that with this assurance my hon. Friends will feel that I have done my best to meet a difficult and complicated situation.

Sir James Hutchison: My right hon. Friend has given a figure as to how much the Treasury would lose on the broader, all-embracing question. How much is at stake on the lesser question of the dependent territories and the Colonies only?

Mr. Macmillan: I cannot say; I have no figure to give, but obviously it would be much smaller. Even then, however, the definitions, the rules and the regulations as to how the money is to be brought back, will all need a great deal of thought. We will do it, but it will need quite a lot of working out and it is more than I could undertake to do at this stage in our Finance Bill.

Mr. Gordon Walker: We on this side were glad to hear the closing words of the Chancellor's intervention. I am sorry, however, that the change was not made in this year's Finance Bill. It is better that it should be done retrospectively than not at all, but it would have been better if it had been done clearly and prospectively instead of retrospectively. The Chancellor must have known about this matter beforehand, for this is not the first time it has been brought to his attention by his hon.

Friends and others who are interested in it.
We must, of course, look carefully at the proposals when they come next year, if the right hon. Gentleman is, in fact, then in a position to bring them forward. There are, however, one or two points I should like to draw to his attention on this occasion. One is that we pay much more attention to the question of the Colonies than to the larger question raised by the right hon. and learned Member for Kensington, South (Sir P. Spens). We are by no means committing ourselves to agreement on the major issues which the Chancellor is thinking about bringing in.
For the reasons given by my hon. and learned Friend the Member for Kettering (Mr. Mitchison), we on this side have many doubts about the bigger issue, but we are completely in favour of the principle raised by the hon. Member for Somerset, North (Mr. Leather) and supported by other hon. hon. Members on both sides.
We would like to see the legislation drawn in such a form that it can confer the benefits on countries like the Gold Coast, Nigeria and Malaya, which will pass out of the state of being dependent territories into one of being full and sovereign members of the Commonwealth. We would not like the legislation—this is the point made by my hon. Friend the Member for Flint, East (Mrs. White)—so drawn that these countries become automatically excluded as they move out of the status of being dependent territories.
Subject to those remarks, which I hope the Chancellor will bear in mind, we are grateful that he has made this concession but sorry that he did not make it in this Finance Bill. It would have been happier and more handsome if he had done so, but we must be grateful for what we can get.

Mr. H. Macmillan: Perhaps the very point that the right hon. Gentleman has raised has made it clear to him why the matter is a little more complicated than it appears. We might have drawn the Clause this year in such a way as to exclude the very territories in which he is most interested. We must make provision for them. I am grateful for the generous way in which the right hon. Gentleman has spoken.
There are one or two points, which I ought, perhaps, to have added in replying to my hon. and right hon. Friends, among the things we will have to do. We should have to make it a condition that we were able to get full information about the operation of the relief in particular cases in the other countries; and we should need power to prescribe methods of calculating the United Kingdom tax relief which would be appropriate to the particular form that the overseas tax relief might take. We might also need power to levy the appropriate tax on dividends received by persons in this country from profits which would have been relieved in the hands of the operating companies. There are one or two points of this kind, which would ensure that the money was used to fructify and not merely to make greater distributions in this country, that we would have to include in our Clause.

Mr. Mitchison: If the Chancellor introduces the minor Measure next year, I hope he will bring the Colonial Secretary with him.

Mr. Leather: I do not think I have ever been conducted from the depths of despair to the broad uplands of delight more artistically than my right hon. Friend the Chancellor of the Exchequer has conducted me in the last 15 minutes.

Mr. John Rankin: Do not get emotional.

Mr. Leather: Why not? This is something about which a lot of us feel very emotional, My devotion to the cause of the Colonial Empire contains a large element of emotion, and I do not withdraw it even on behalf of Scotland.
This concession is something for which many people who are concerned in the development of the Colonies, on both sides of the Committee, and particularly the Colonial Governments, will be for ever in my right hon. Friend's debt. We are most grateful. This pledge could not have been more specific. All I can do is to say "Thank you" and beg to ask leave to withdraw the Motion.

Mr. Glenvil Hall: Before the hon. Member for Somerset, North (Mr. Leather) withdraws the Clause, may I say that although, like my hon. Friends on the Front Bench, I am duly grateful for the promise which the Chancellor of

the Exchequer has made, I find the whole thing extremely unsatisfactory? What the right hon. Gentleman is doing is to promise that next year—and I should like an assurance that his promise goes for any successor who may occupy his place next year—he will introduce retrospective legislation, which all of us deplore and most of us dislike. It is an unsatisfactory situation and one which should never have arisen.
It is obvious that the Clause has been on the Order Paper for some time. The right hon. Gentleman must undoubtedly have had his attention drawn to it. He cannot have made up his mind about it this afternoon. If he has clone, it is a shocking situation for any Chancellor to be in. If he has been minded to accept the situation as it has been put this afternoon, he should not have left the matter in this way. Therefore, while being duly grateful for what the right hon. Gentleman will do next year, if he is then occupying the same position, I must register my protest at the way in which it is being done. It is another example of the shocking muddle in which the Chancellor leaves our affairs.

Mr. H. Macmillan: If I may say a word in reply to that very gracious speech, I do not think retrospective legislation is to be deplored so long as due notice is given of it. What has always been deplored is retrospective legislation that people did not know would happen. There are many precedents in the additional allowances and other such arrangements.
As regards my having accepted in spirit one of the new Clauses, I am bound to say, in view of the very large Order Paper, that if I am to be reprimanded for having accepted one suggestion, it would certainly fortify me in refusing all the rest.
Motion and Clause, by leave, withdrawn.

New Clause.—(REDUCTION OF ENTERTAINMENTS DUTY IN RESPECT OF CERTAIN CINEMATOGRAPH ENTERTAINMENTS.)

(1) The third, or highest, scale of entertainments duty set out in Part III of the First Schedule to the Finance Act, 1954, shall have effect subject to the amendments stated in the next following subsection in relation to payments for admission to which that scale and this section apply.
(2) The said amendments are that the two first-mentioned amounts of payment and the corresponding rates of duty shall be omitted


and that in relation to all other amounts of payment shown in the said scale the appropriate rate of duty shall be reduced by one penny.
(3) This section shall apply, and shall be deemed to have applied, to payments for admission (wherever made) to entertainments consisting wholly or mainly of the exhibition of a cinematograph film or cinematograph films and held on or after the sixth day of August, nineteen hundred and fifty-six; and where entertainments duty has been charged on any payment made before that day and by virtue of this section a less amount of duty should have been charged than the amount which was in fact charged, the person by whom the duty was paid shall be entitled to repayment of the overcharge.—[Mrs. White.]

Brought up, and read the First time.

The Temporary Chairman (Mr. James H. Hoy): It would be for the convenience of the Committee if we also discussed the next new Clause in the name of the right hon. Member for Huyton (Mr. H. Wilson), concerning the reduction of Entertainments Duty on small weekly takings at cinematograph theatres; the new Clause in the name of the hon. Member for Honiton (Mr. Mathew), for the amendment of Section 17 of the Finance Act, 1948; and the new Schedule in the name of the right hon. Member for Huyton concerning the reduction of Entertainments Duty on small weekly takings at cinematograph theatres.

Mrs. White: I beg to move, That the Clause be read a Second time.
As all these new Clauses and the Schedule deal with different aspects of the cinematograph film industry, it would be convenient to consider them together. I will devote most of my attention to the two Clauses in the names of my right hon. Friends and myself. Those two Clauses have been put on the Order Paper to draw attention to what we believe is a very serious situation in the cinema industry.
I am aware that this industry may have the reputation of crying "Wolf", and therefore it is perhaps not recognised that the present situation in the industry is such that there is urgent need for some action to be taken. I want to draw the Financial Secretary's attention to some of the general considerations before I address myself more specifically to the details of the new Clauses.
The position at present is that the cinema industry pays a very much heavier rate of Entertainments Duty than any other form of entertainment. Very few business enterprises in this country are expected to bear a tax which last year amounted to about 32 per cent. of its gross takings and approximately 50 per cent, of its net takings. That is an extremely heavy imposition. The Chancellor draws from this industry about £33 million a year. That amount has declined over recent years, and is presumably still declining, owing to the decrease in attendances at cinemas.
I would say, in parenthesis, that this tax is charged upon the sale of tickets for entry to cinemas and is not a tax on profits. This very heavy tax may have to be paid even though both the exhibitor, who collects the tax on behalf of the Government—and incidentally charges nothing for doing so—and the producer of the film being shown are involved in a financial loss. It therefore bears particularly heavily on any industry which for one reason or another is in a state of decline.
Unfortunately, no doubt owing largely to the counter-attraction of television, one cannot escapt the conclusion that at the moment the cinema industry is in particular difficulties. Attendances in 1955, compared with those in the previous year fell by 7 per cent. This fall was marked in all regions of the country but particularly in the southern, London and south-eastern regions, where television, including commercial television, was available as an alternative.
In spite of rising costs, which the industry experiences in common with all others, the industry's gross takings in the last full year fell by nearly 4 per cent.— £4 million. With the change in the value of money one would have expected them to rise. It has been calculated that the drop in the profits of the exhibiting side of the industry amount to nearly 48 per cent. since 1951—and that despite increases in seat prices in that period. The British Film Production Fund, which is directly related to takings, has never yet reached the estimated total; it has been less each year than was hoped, both relatively and absolutely.
In the last year there has also been a decline in the number of British films registered, from 476 in the year ending


31st March, 1955, to 388 in the year ending 31st March, 1956. I will return to that aspect of the matter in a moment.
5.15 p.m.
I have said enough, I am sure, to convince the Committee that there are definite reasons for which some action should be taken at this time; and we have therefore put down these two new Clauses. The first is directed primarily to drawing attention to the general position in the industry and, through that, to the needs of the producers. The second new Clause has a slightly different emphasis in that it is directed more particularly to the special difficulties of the smaller exhibitors.
May I say frankly at the outset that neither of the new Clauses is so drafted that, if carried, it would meet the needs of either of the two bodies about whom we are concerned. The reasons are different for each of the Clauses. For the first, where we are more specially concerned with producers, we have suggested in the new Clause withdrawing the Entertainments Duty altogether in the lowest part of the scale and reducing it by a nominal amount of 1d. at all other stages in the scale. That amount of ld. is put down in order to afford an occasion for a debate. We do not pretend that that amount would be satisfactory, but the Financial Secretary will appreciate that had we not done it in this way it would have involved extremely complicated calculations in the Schedule on Entertainments Duty.
It would have had another disadvantage. Had we been more specific in our recommendations, they might have tied us to a particular figure for total relief. I say this advisedly. We are all aware that on this occasion the industry has managed to reach an unusual state of agreement, in that all sections of the industry approached the Chancellor with the report of the All-Industry Tax Committee, putting forward a joint case. That joint case was based on certain calculations which, frankly, my right hon. Friends and I could not accept without reservations. If those calculations had been accepted by the Chancellor, the result would have been a remission of tax of nearly £20 million a year; and that, after all, is a very considerable sum. Before supporting the All-Industry Tax Committee's demands, we should have to take into account a great many details,

which we on this side of the Committee are not in a position to do.
The matter would also have to be further considered in that that the recommendation of the Committee was based on accepting as normal two rates of profit —25 per cent. for the producer and 15 per cent. for the exhibitor, over their total trading for the year. They are rates of profit which, quite frankly, we believe to be questionable. I do not think anyone in the Committee would be prepared to accept without considerable investigation the suggestion that 25 per cent. overall should be regarded as a normal rate of profit, although clearly in such a very chancy industry as film production, one might reasonably hope to obtain 25 per cent. on some enterprises. For those reasons we have put down what is obviously a nominal amount.
Although the form in which the new Clause is drafted is as I have described it, the intention is emphatically to urge that the Chancellor should give some measure of relief in the matter of Entertainments Duty which would have the result of benefiting the production of British films. We have a long story of legislation in this country concerning the cinematograph film industry, and most of it has as its object, very properly, the encouragement of the production of British films. Clearly, the exhibiting side of the industry is a necessary part of this operation, but we are primarily concerned in our efforts in the House to see that British films have a fair chance.
We have quota legislation, which does not concern us this afternoon, and we have other methods which are sometimes spoken of in such a way as to suggest that this industry is being heavily subsidised. That is not the case. The British Film Production Fund is a levy on the industry and not a Government subsidy. It is paid after tax has been collected. It may be argued that the level at which that levy can be collected is to some extent dependent upon the rate of tax which the Chancellor collects. In fact, many of us would wish to argue that there is a definite relationship between Entertainments Duty and the Eady levy.
It has been fashionable in the Treasury recently to try to suggest that that is not so, but the Treasury cannot have it both


ways. One might say that there is an element of indirect subsidy, in that if the Chancellor decides to remit a certain amount of tax the Eady levy can be increased, but there is no direct subsidy involved. The only direct subsidy has been through the National Film Finance Corporation. In that connection, one can point out that during its existence the National Film Finance Corporation has lost a sum of £3¾ million, but that sum has been lost in a period in which the Chancellor has collected £70 million from performances at which a British film was the first feature and, presumably, the main attraction of the programme. When one takes that £3¾ million on the one hand and the £70 million on the other, I think the Committee will agree that it cannot for one moment be argued that the film industry is heavily subsidised. On the contrary, it heavily subsidises the Chancellor of the Exchequer.
There is also the fact that the film industry is making considerable overseas earnings. Its product has sometimes been called the ideal export because, the films having once been made here, there are very few other expenses and we are exporting something which we believe is of great advantage to us nationally, in that the films depict what we are apt to call the British way of life. The Rank Organisation claims that about 50 per cent. of its earnings come from exports. For the film industry as a whole, roughly one-third of its total earnings, as far as I can judge, come from overseas. It is, therefore, of obvious importance to the Chancellor that the industry should be encouraged and not discouraged.
Even taking these overseas earnings into account and making allowances for the British Film Production Fund, there is still a deficit on British film production. Without going into the debatable question of the level of profit which should be regarded as normal, it is perfectly clear that there is, without taking profit into account at all, a gap of some £1 million a year which has to be met if the industry is to break even, without making any allowance for any rate of profit or for putting money to reserve, which is essential in such an industry.
I therefore think that we are fully justified in asking the Chancellor to look at this matter again and to consider further the representations which have already

been made to him from all sections of the industry. Otherwise, what will happen is that this industry will either decline or will be more and more dependent on outside sources and, in particular, on United States money. While we may not object to that up to a point, I am sure that we would all agree that it could easily go beyond the point at which we felt we were maintaining a satisfactory state in the British industry.
In particular, future production in this country is being jeopardised because of the uncertainty about the levy. I hope that since the Second Reading of this Bill the Financial Secretary has had some consultations with his right hon. Friend the President of the Board of Trade, and may be able on this occasion to make some announcement of the President's intentions, which so closely concern what we are now discussing. The Eady levy is due to expire in October, 1957, and I have already explained during an earlier stage of the Bill it is absolutely vital that the industry should know as early as possible what action the Government propose to take. If, as is said by the exhibitors, they will refuse to carry on the levy unless they have firm assurance of tax concession, it seems to me that there is a complete case from the producer's end for a Government statement of policy at this present time.
I turn briefly—because my hon. Friend the Member for Govan (Mr. Rankin) will deal more fully with it—to the second new Clause standing in our name. That has the more limited but very desirable object of assisting these small cinema exhibitors who are in peculiar difficulties at the present moment. Once again, I admit frankly that the Clause as drafted is perhaps not an easy one to defend, but the Financial Secretary will fully appreciate that it is virtually impossible to put down on the Order Paper a Clause which is both in order and workable. That is largely owing to the way in which the Money Resolution has been drawn, and also to the persistence of what has become, we believe, a fiction, that Entertainment Duty is paid by the person buying the ticket and not by the proprietor of the cinema.
My own personal belief is that it would be very much better if this tax were levied on gross takings. That still would not alter the fact that it was levied


on gross takings and not on profits, but it would be very much simpler, if the industry would bring itself to urge that the tax should be levied on gross takings rather than on individual admissions, because then at least one could do something more practical in the way of rebates, different rates of tax and so on. if one wished to help a particular section of the industry. At the moment, it is very difficult to do so.
I recognise that in a later new Clause another method is suggested of trying to extend the rural areas provisions, as they are called, but, of course, they too have led to some most peculiar anomalies in the past. One could possibly try to do it by taking cinemas which seat five hundred or fewer, or four hundred or fewer —whatever figure might be chosen—wherever they happened to be situated and regardless of the particular area. There are various ways in which this might be dealt with, and if the Financial Secretary brought forward some scheme which the Treasury thought workable, I am sure that as long as that scheme fulfilled the main purpose we would have no objection to it.
Whatever method is chosen, the fact remains that, with rising costs and lower attendances, a large number of these smaller cinemas will be obliged to close in the fairly near future unless some measure of relief is given to them. To abolish the tax altogether on admissions to cinemas of five hundred seats or under would cost, calculated on recent figures, not more than £1¼ million, but there would then be the problem of the very big jump in the next category of cinemas. I am assured by those concerned that, with their present takings, they simply cannot keep their premises in decent repair or meet the cost of renewals of carpets, seating and so forth.
I have a number of letters on this subject, but I will read only one or two sentences from one of them. This is from an outraged cinema proprietor in a small town in the West Country. He says:
During the last three years, I have carried on hoping that business would improve and that tax exemption would be granted by the Chancellor of the Exchequer to all small cinemas. I have had no pay for all my trouble and expense during these three years, although I have some £1,000's sunk in this cinema. How would you like to work for nothing and have no interest on your capital and be unable to sell out at any reasonable price?

5.30 p.m.
I have another correspondent who sends me chapter and verse for the first quarter of this year. He points out that, with a cinema seating 550 people, he has had to pay in Entertainments Duty £559 over the quarter, although he has made a loss of £420 after paying that Duty, and has been able to draw a total of only £11 a week as wages for both himself and his wife who works with him in the cinema. I have a number of other letters, Sir Rhys, but I will not weary the Committee with them now.
It is incontrovertible that these smaller cinemas are threatened with closure. There were 53 which closed last year, and an article on cinema statistics in the Board of Trade Journal points out that a higher proportion of the net closures than in 1954 was of cinemas seating fewer than 500 persons. We believe that is only the beginning of what may have to be a very large-scale closure, unless something is done.
It may be argued, against what I have been saying, that if these cinemas are in such difficulties they should put up prices. As we all know, a decision has been reached by the circuits—it is open to the individual cinema to do what it likes about it—to put up the prices of a numbber of seats. But, of course, under the present tax structure, if the prices in a cinema are put up, it is not the proprietor who benefits primarily but the Chancellor of the Exchequer. We all know that, particularly as regards the cheaper seats, which are the ones having a preponderance in the smaller cinemas, the Chancellor gets a completely disproportionate amount from any increase. The recent increase from 1s. to 1s. 6d. makes this clear. Fourpense of that increase goes to the Chancellor, a ¼d. goes to the Eady levy, and only 1¾. goes to the proprietor who is trying to meet his costs but is unable to do so for the reasons I have given. That is, of course, another argument for reconsidering the basis of the present system of taxation. In the meantime, it is perfectly clear that, even with this increase in the price of seats, it is unlikely that cinemas will be able to meet their commitments.
I have endeavoured to find out what the estimates are of what the returns from this proposed increase will be, and, frankly, I have been unable to obtain any


firm figure, although I have been to the very highest quarters for information. One reason is that, even in the circuits it has not been decided that this increase shall take place in every cinema. The advice I have been given is that those concerned hope that the increase now agreed upon, which is to take place, will at least balance the expected decline in attendances. In other words, they put it very little higher than that; they say that while they think the increased price will keep their gross takings in balance, they do not expect any positive increase from the increased prices, because they fear that the decline in attendances, which is already apparent, will continue. We cannot, therefore, turn to that expedient as a remedy for the very serious ills which affect this industry at the present time.
I would conclude by pointing out that the British cinema industry has, as its main competitor, the cinema industry of the United States of America. In the United States, the industry has, in terms of box office values, 60 per cent. of the world market within its own country. In similar terms, we have about 15 per cent. In the United States, the tax has been reduced since the advent of television. The result is that in the United States the industry has to bear a tax of roughly 10 per cent., compared with roughly 33 per cent. in this country.
We on this side of the Committee believe that the burden which the cinema industry is being asked to carry in present circumstances is out of proportion to the real facts of the case, and we ask, therefore, that some immediate indication of relief should be given.

Mr. Robert Mathew: I shall confine my remarks to the proposal contained in the new Clause standing in my name and the names of several of my hon. Friends to amend Section 17 of the Finance Act, 1948. I wish to draw attention to a small, but important, section of the cinema industry which is suffering particular hardship at the present time, namely, the small country cinema with less than 400 seats, situated in a small country town serving primarily a rural community and which is surrounded by a landward farm area from which people come to the small town for their entertainment.
Might I remind the Committee that Parliament granted exemption from Entertainments Duty to some, but only to some, of this type of cinema under Section 17 of the Finance Act, 1948. There is in that Act a formula arrived at which provides that to claim exemption a cinema must not have more than 400 seats and must be in a local government area with an average population of not more than one to the acre, that is to say, 640 to the square mile. This formula has not worked out as it should, and half of this class of cinema still lies outside the exemption. I ask my right hon. Friend to bring all small cinemas into this category for which the exemption in the 1948 Finance Act was designed.
What has happened is that the accident of size of population in urban districts has meant that a large number of these smaller cinemas in tightly packed small towns—usually old towns, with narrow streets and small houses, with a high population on that account—still pay tax, whereas in certain other, very often urban, districts which for some historical reason have included a great deal of sparsely populated landward farm area having a low average population per square mile, small cinemas escape Entertainments Duty altogether.
I know that this subject has been raised in this Committee year after year. Nevertheless, I say to my right hon. Friend that it is now of the utmost urgency, since the problem is solving itself over the years and now even month by month by bankruptcy and the extinction of the cinemas themselves. It is not merely a matter of the extinction of a modest family business, but also the extinction of a rural amenity. In practice, it has been found that when one of these cinemas goes out of business, falls by the wayside, it is not replaced by one of the big combines or a bigger cinema business coming in. The scope of business in most of these areas is so slender as not to attract the combines or big cinema circuits; it is something which can only be met by a family or a small modest business and by no other form of organisation.
A great deal is said by hon. Members from time to time about the drift from the land. One of the major factors in that drift is the lack of modern amenities, including entertainment. When small cinema of this kind goes out of


business the people living nearby, who wish to have some entertainment after their working hours, have to go by car or bus to the nearest big town, which may be 15 miles away, instead of being able to go perhaps only three or four miles to their nearest smallest country town.
I am told that when exemption was first granted there were about 600 cinemas in this category, of which about 300 obtained exemption. I doubt whether half the 300 which failed to obtain exemption are still in existence. The others have all fallen by the wayside. I know that others are waiting to know what will happen as a result of this Bill before deciding whether or not to close, and still others are being carried on in circumstances of the greatest difficulty. As I have said, they are mostly family businesses, and I know a number of cases where they have been carried on by husband and wife, but where one of the partners has now had to take outside employment to supplement the family income, thus increasing the difficulties of running the cinema.
I have seen a number of figures concerning cinema proprietors in my own and other areas, which show that, on the average, between 31 and 34 per cent. of the takings goes to the Chancellor. I have heard it suggested that this problem is a purely local one, confined mostly to two areas—the west of England and the south-west of Scotland. It is true that the problem occurs in acute form in the west of England. It exists in my own constituency of Honiton to a marked degree. The areas of Exmouth, Topsham and Budleigh Salterton are not exempt because they are tightly packed, whereas Sidmouth is exempt because, for certain historical reasons, it happens to have included within its administrative area a former rural district. This particular case, I believe, is known in the cinema world as "the classic anomaly."
During the last fortnight I have received letters from the Midlands, Lancashire and rural Wales, and even two from Scotland, supporting my Clause. I ask my right hon. Friend to reconsider the problem again before the Bill reaches the Report stage. Next year it may be too late.
The concession to these small rural cinemas cannot amount to very much in terms of revenue, and it cannot be beyond

the wit of man to devise a form of words which would not be so comprehensive as to include cinemas for which the benefit was not intended. The whole problem is on a small scale. I suggest that the formula contained in my Clause is worthy of consideration in that it leaves the ceiling at 400 seats and increases the population formula from one to the acre to four to the acre. I am told by the experts in the cinema industry that this would include between 150 and 200 cinemas which are now suffering through what amounts to an injustice. Although this is a small matter in terms of revenue, I suggest that hon. Members have a duty to these modest family businesses which are rapidly becoming bankrupt, and also to the rural communities which they serve.

5.45 p.m.

Mr. Rankin: I want to speak particularly to the proposed new Clause dealing with the weekly takings at small cinemas. On 10th February I had the privilege of introducing a Motion which provided a debate upon the state of the industry. I think it is fair to say that on that occasion hon. Members on both sides of the House were seized of the immediate gravity of the situation which we are presenting tonight.
Upon that occasion the Parliamentary Secretary to the Board of Trade intimated that he would see that the views expressed were borne to the Chancellor of the Exchequer. The right hon. Gentleman has therefore had ample time in which to make himself familiar with what has been already said, and we hope that the additional arguments put forward tonight will result in a concession of some kind being made before the debate terminates. He has already displayed a tendency towards giving and the House always "loveth a cheerful giver." We hope that when he considers the arguments he will continue the attitude which he displayed on the previous proposed new Clause.
I am told that the Clause to which I am speaking is in order but is not workable. Prior to framing the one which is now on the Order Paper, we had prepared one dealing with remission from the point of view of a rebate. That Clause was not in order, but we were told that it was workable. I do not want the Chancellor to fall between two stools, and I therefore suggest that


he should not seek an escape on the ground that the Clause to which I am speaking, while in order, is not workable. He should try to examine carefully the serious plight of the small cinema. If he believes that a case is made out for it he can take the appropriate steps to meet that case on Report.
Some of the evidence has been presented by my hon. Friend the Member for Flint, East (Mrs. White) and also by the hon. Member for Honiton (Mr. Mathew). Within the last few months, we have been told with authority that in the south and east of Lancashire no fewer than 15 small cinemas have closed down; since Boxing Day, 1955, no fewer than 57 cinemas in various parts of the United Kingdom have also closed, while 15 closures have occurred since the Chancellor intimated in his Budget that he could see then—although, we hope, not now—no chance of doing anything either for the small cinemas or for cinemas in general. Such closures continue and will go on. I have been informed within the last few days that one of the oldest cinemas in Nottingham, the Boulevard, is closing down because, in the words of the proprietor, the Chancellor has taxed it out of existence.
The strange thing, which I hope is present in the Chancellor's mind when, by his policy, he causes cinemas to close, is that he is losing income by such action. In this year, because of the closing of cinemas, he has already lost some £100,000 in tax. We have, then, the evidence that the cinemas are closing down simply because they are unable to continue in operation under the weight of Entertainments Duty.
Sir Michael Balcon, one of our greatest film authorities, writing in the Financial Times of 8th June last year, said:
Only a very large reduction in the rate of entertainments tax, enabling a much larger proportion of box office receipts than at present to be paid as film rentals, will enable British film makers to continue in production.
The continuance of the production of films depends directly on the amount that is levied by way of tax on box office receipts. Many of us may deplore that way of keeping the film industry going, but it is the way which exists, and if we are to help the production of British films under the existing system, the only

way of doing it now, in the view of Sit Michael Balcon, is to reduce the Entertainments Duty. The Chancellor, it is clear, is steadily killing the geese which have been laying the golden eggs.
I want to quote one or two letters in support of the case that is being advanced. The first letter comes from my own city of Glasgow, and I quote it because it is from a gentleman who is well respected in the city of Glasgow and who bears an honoured name in the cinema world, and I quote it also because it is the first time he has ever written to me about the position of the industry as it affects him particularly. This letter is from Mr. George Singleton who, as he tells me, with his brother runs eight cinemas in Glasgow. One of them is particularly well known because it seeks to provide programmes of a different type from the average cinema programmes. He writes:
We do not want our cinemas to get into a state of disrepair, nor do we want to sell out to the circuits; we want to carry on doing what we sincerely believe to be a job of some social importance, i.e., providing cheap entertainment to thousands of working people every week. But we cannot continue as at present.
My hon. Friend the Member for Flint, East said cinema owners might raise prices. Mr. Singleton comments:
We, too, should like to do this, but our problem is Entertainments Tax. Our basic admission price is 1s. Of we raise this by 6d. (50 per cent.) we will only benefit by 1¾. The incidence of tax and the levy takes 4¼d.
I take a letter which I have received from Mr. W. J. King. I have never met the gentleman, and I do not know him. Many hon. Members, I assume, have had similar letters from this gentleman. I quote this one because he is dealing with his own cinema, the Ritz at Potters Bar. He points out:
It was reopened on Boxing Day, 1954, and notwithstanding the improved conditions it runs at a loss. During the year ending Boxing Day, 1955, more than £8,000 was paid in Entertainment Tax. No rent has been paid and no interest on capital charged, and obviously this cinema will have to close unless some relief is afforded.
Obviously something has to be done. The case that we are presenting to the Chancellor has now been substantiated by the trade unions. I have here a pamphlet, a joint statement, from all the unions connected with the industry, with both the


productive and exhibiting sides, in which they state:
 The Government has lamentably failed to respond to the approaches from the industry to lessen the grossly unfair burden of the entertainment tax on the cinema industry.
I think the case is well made out by those who are interested in the industry. With whatever aspect of it they are connected, they are unanimous in the view that something has got to be done; and what has got to be done is to reduce Entertainments Duty.
We may well ask what is done in other countries. is the cinema industry, assisted there? In America it is helped by way of a tax which is three times less than what is paid in Great Britain. In America the tax is 10 per cent. as compared with the tax of 33 per cent. in our own country. America helps the industry.
In Italy there is at the moment a Bill before the Italian Chamber of Deputies. I have a copy of it here sent me by Signor Nicolo de Pirro. [HON. MEMBERS: "In Italian?"] I have a translation of the Bill. I do not want to deal with the production side, but I may briefly point out that the Italians are by this Bill, presently before their Parliament, seeking to aid the production side, to improve the qualitative aspect of films, to help the production of films for youth, and so on.
6.0 p.m.
I am not suggesting in any way that we are not trying to do the same thing. But we are not trying to do it with sufficient intensity, and that is what we on this side of the Committee are urging on the Government today. Italy has created under its Bill a 500 million lire production fund, and from that fund the small exhibitor is, able to help himself for the installation of equipment, improvements and furnishings. The Italian Parliament believes that the Bill will benefit the 2,000 small exhibitors in Italy who, like the small exhibitors in this country, find it very difficult to carry on. There are similar examples in other countries.
The Chancellor may say that, whilst he is anxious to emulate those examples, they run counter to his Budget policy. I suggest that he can help the small exhibitor, in particular, without any loss whatsoever to the Treasury. The big circuits are increasing their prices. If all cinemas in Great Britain follow that example, it will mean £13,830,000 of

additional public expenditure. I do not know whether the Chancellor wants to see that taking place or not. If it is his action that is causing this increase in the price of admission to the cinemas and therefore causing the spending of more money, that decision runs counter to the policy which he is seeking to bring into effect.
Out of the £13 million additional expenditure, which will take place if all cinemas put up their prices, the Chancellor will receive £7,750,000, and to the industry will go £6 million. But of the £13 million additional money which will be spent, £64 million will be spent by those who patronise the new ls. 6d. seats and £3,170,000 will be spent by those who go to the new l s. 10d. seats. Therefore, it can be said with accuracy that over £9 million will come from the pockets of the working class. Does the Chancellor want to penalise the workers in particular? It seems like it if he does not do something about this matter.
As we have indicated, however, it is most unlikely that the small cinemas can afford to put up their prices. Therefore, if we assume that only the big circuits will increase their prices, as some have already done, the Chancellor will receive between £3 million and £4 million as a result of that action by the big circuits. They are providing the money with which the right hon. Gentleman can help the small cinemas if he wishes to do so.
I know that the right hon. Gentleman likes to play the part of Robin Hood sometimes, by taking something from somebody to give to somebody else. He is not required to take in this case. He is being given £3 million to £4 million, and I ask him to take £11-, million of that money and use it to help the small cinemas. Nothing will be required from the Treasury at all. At the end of the transaction the right hon. Gentleman will be at least Eli million to the good in a full year. In the remainder of this year it will be proportionately less.
I beg the right hon. Gentleman not to reject the new Clause of which I am speaking. There may be difficulties about the one which was so ably moved by my hon. Friend the Member for Flint, East, and it might possibly require him to yield something from the Treasury. but in the case of this Clause, dealing


with small cinemas, he need not part even with a smile. The right hon. Gentleman appears to be sleeping and is not listening to what I am saying, and therefore I repeat that he need not part with anything at all. It is being given to him by the action of the big circuits, and I ask him to use the £3 million to £4 million which he will receive to help the small cinemas to carry on.
I plead with the right hon. Gentleman, therefore, to accept the case in principle and not to argue that, technically, the Clause is not workable. I ask him to allow his generous heart to have sway.[HON. MEMBERS: "Oh."] I have no doubt that, properly approached, the right hon. Gentleman has one. I am seeking the proper method of approach. I ask him to give away part of the money which is coming to him from the big cinemas and not to ride off on the escape route that the Clause, as framed, is not workable, but to put it in working order on Report. in which case, on both sides, we shall rise up to call him blessed.

Captain J. A. L. Duncan: I should like to add to the pleas which have already been made for some alleviation of tax on small cinemas. Year after year I have sent to the Chancellor of the Exchequer the audited accounts of small cinema concerns in my constituency, which show that they are not making a profit, nor are able to furnish their cinemas in the way in which they should be furnished. I have visited some of these cinemas and have seen the seating, lighting and other things, dingy, dark, shabby and worn-out. Money is not coming from the box office to keep the cinemas up-to-date.
The cinemas in my area contribute towards the amusement and entertainment not only of the local population, but of the holiday population. We do our best to encourage not only the English but many other nationalities from all parts of the world to see the beauties of our countryside. The cinema, as part of an entertainment in a local town, is all part of its tourist attractions. These small cinemas cannot make ends meet if they are shabby. Either they will have to close, as many of them are about to do, or they will not be a credit to the locality.
If these cinemas can keep open, it is only because they are making additional

income by sales of ice cream and chocolates. If it were not so generally known that cinemas are in a bad way financially, the local confectioners and ice cream merchants would be up in arms at the cinemas selling their goods, but, because they know the position, they are bearing with it.
There is a further difficulty which the small cinemas are facing. Following the development of Cinemascope, the film producers are making more and more films for Cinemascope only. To convert the ordinary screen involves not only a new screen but a new set of lenses, the average cost of which is possibly £2,000.

Mr. Rankin: More

Captain Duncan: It may be more. I have put the figure low, but even that is a large sum for a small company or individual to put up, and there is not that surplus available with which to modernise these cinemas
That is having another effect, namely. that as the new films are not being produced to the size of the old screen, these cinema owners are getting more and more restricted in the films they can exhibit. The result is a lessening of the attraction of the programme, because they have to take old films which have been re-screened and which everybody has seen before. If these cinema exhibitors are to be helped to modernise their premises, they must have enough money available with which to put in the Cinemascope screen, lenses and cameras.
There is a further point of difficulty for the small cinemas. The key man in the cinema is the projectionist. I am not an expert on wages, but I am told that the wages of these skilled workers are deplorably low. I believe that rates are agreed by negotiation between masters and men in the normal way. However, both sides recognise that there is not sufficient money available in the industry, particularly in the case of the smaller cinemas. to pay the proper wage for the job. At Christmas it was a little more than £7 a week, but I believe that this has been raised slightly since then. So, even by agreement in the industry, it is not possible to pay the type of wage to a skilled chief projectionist which all of us would like him to receive.
For all those reasons, I make my plea in support of some action being taken


now to help the small cinema. Whether the method should be that proposed by my hon. Friend the Member for Honiton (Mr. Mathew), or whether it should be the method proposed by the hon. Lady the Member for Flint, East (Mrs. White), I do not mind. Personally, I think that the best way would be to reduce the tax generally for the small cinema owners rather than to give some exemption to a small section, which my hon. Friend admitted involved only a couple of hundred cinemas.
6.15 p.m.
A few months ago I submitted a scheme of my own to the Chancellor of the Exchequer. My hon. and gallant Friend the Member for Roxburgh, Selkirk and Peebles (Commander Donaldson) mentioned it in outline in the debate which was initiated on 10th February last and which has been referred to this afternoon. Apparently, my scheme was not wholly satisfactory and it would not have been in order to put it on the Notice Paper. My object was to reduce tax on the small cinemas at the expense of the bigger ones which, from all reports, are not doing too badly.
If we could abolish the tax on, say, the first £100 of weekly takings and reduce it progressively up to, say, £450 of the weekly box office takings, that would help the small cinemas. I do not regard that as the only solution, but it was an attempt on my part to help the small cinemas, even if the big ones had to pay a little more.
The Chancellor does not seem to be forthcoming on this subject in the present Budget. The advantage of my scheme was that it would not cost him anything. The hon. Member for Govan (Mr. Rankin) has given the Committee information on the raising of prices which shows that the Chancellor not only will not be losing anything, but will be gaining something by the rise in the price of seats. I hope, therefore, that my right hon. Friend will reconsider his decision to do nothing for the cinema in view of the recent developments which show that he will be increasing his revenue, rather than losing any.
If my right hon. Friend cannot accept a scheme such as I put up to him, or one of the other suggestions, I hope he will bear the matter closely in mind and

do something next year. [HON. MEMBERS: "Too late."] As my hon. Friend the Member for Honiton has said, this matter is serious. Many cinemas have closed, and others are threatening to do so. In those circumstances the revenue will go down, and my right hon. Friend will lose money if he does not do something quickly. It seems to me that in the interests of the general entertainment of the country, and of the small country districts in particular, my right hon. Friend ought to do something for the cinema in this Bill.

Mr. M. Philips Price: I want to add my word for the small cinemas, of which there are a number in that part of my constituency which contains mining villages. They are a great advantage to the mining population who want a little recreation and relief, and for whom it is not always easy and convenient to take long bus rides of half an hour or three-quarters of an hour to the large towns. Cinemas, therefore, are a great amenity, and it is desirable in more ways than one that they should be kept open.
At present, there is tax exemption on the basis of population per square mile. I do not know how this works out as regards population per acre, but a small cinema owner in my constituency has written to me pleading, on the assumption that tax is not applied to a population of less than one person per acre, that it should be raised to 11 persons per acre. I have not worked out the figure, but it seems to be along the lines of the third new Clause we are discussing, which asks for the figure to be raised from 640 to the square mile to 2,560—[An HON. MEMBER:" Four] Is that four persons to the acre? [HON. MEMBERS: "Yes."] I see. Anyway, it is desirable that it should be raised by at least 50 per cent. to cover the small areas of low population where overhead costs are relatively great, the turnover not being equal to that in the more concentrated areas where. naturally, the overheads are less.
In view of the special amenities involved, taxation policy should take into consideration the areas where the overhead costs of running small cinemas are greater. These days the cinema has many competitors, including television, but in the areas about which I am speaking there is a section of population


which cannot afford television sets—not yet, anyway. If the cinemas go, the people in these lower income groups will have nowhere to go.
Consequently, I would plead very strongly that the Chancellor should consider this proposal. By making a concession of this kind, he will not open the floodgates of expenditure and thereby increase inflation. He may lose a little money, but I do not think it will be very much.

Mr. Rankin: My hon. Friend must have missed the point made a little earlier, that, as the large circuits are putting up their prices, the Chancellor will not lose any money. If he gives this concession, he will actually gain money.

Mr. Price: I am very glad to hear that correction by my hon. Friend. It strengthens the point that I am making, that the Chancellor has nothing to lose by making a concession. Consequently, I hope that the Chancellor will consider this proposal.

Mr. Geoffrey Hirst: I am very grateful to the hon. Lady the Member for Flint, East (Mrs. White) and her hon. Friends for paving the way for a discussion on the important subject of Entertainments Duty, on which we spent some time on 10th February.
In the course of her remarks, the hon. Lady referred to the increase in prices announced by the circuits. Although we may regret it from the point of view of tact—I am not sure that it is the height of tact—it shows the abject folly of the present cinema entertainments tax, if it was not already clear to everybody. The hon. Lady and the hon. Member for Govan (Mr. Rankin) have shown how absurd it is in their example of the ls. 6d. seat. The Is. price goes up 50 per cent for a modest little seat, but only an extra lid. remains in the hands of the exhibitor.
There is some force in the argument advanced from both sides of the Committee that, the circuits having taken this action—they had to take it, because they do not feel much faith in what may be coming to them—and there being a possibility that other cinemas will have to follow their lead—I do not see how they can avoid following the lead given by the circuits—the tendency will be distinctly

more inflationary than the modest concession which is proposed.
I know that a good deal of the increase goes in what I term "Exchequer grab", but the fact remains from the figures quoted, with which I concur, that £5 million to £6 million is left to the exhibitor and the rest goes in tax. These figures will definitely mean that more money has to be found by the public, and it will have an inflationary effect.

Mr. Rankin: The hon. Gentleman says that £5 million to £6 million will go to the exhibitor. When I quoted those figures I did not want to go too far into them. However, off that amount comes the Eady fund contribution, plus the 35 per cent. rental hire, which comes to nearly £2 million.

Mr. Hirst: Yes, I appreciate that. I was referring to gross figures.
In mentioning the concession, I refer to the Schedule. I must acknowledge that, however desirable it may be, it is not possible for my right hon. Friend even to consider the wider scheme put up by the industry. I am glad that box office figures are mentioned. The fact remains that total attendances have fallen from the highlights of 1946 by 400 million a year. Even if one takes a more normal year, 1953, they have fallen by 115 million. Those who do not follow as intimately as some of us do the film industry's statistics should not imagine from these depressing figures that the industry is not important and is not worth helping. In spite of the falls, the present figure is about 1,200 million attendances per annum. Therefore, this is a matter of great consequence to the country. The fall in attendance affects not only exhibitors, but my right hon. Friend's pocket and the British Film Production Fund.
The tax is of a punitive character. It is not right that this state of affairs should be continued in the knowledge of the increased competition which the industry undeniably has to face. It cannot be lost upon the Committee that, while attendances have fallen, costs of every character have gone up, several hundred per cent. in numerous cases, a far greater increase than the increases in price by the exhibitors. My hon. and gallant Friend the Member for South Angus (Captain Duncan) rightly referred to the cost of new techniques.
I recognise the difficulties about doing something at this stage, but it is shameful that the industry should have been so punitively taxed over the years. All Governments are to blame. None can escape the censure that those who are interested pass upon them for this state of affairs. The position has been reached that about 10 per cent. of the cinemas are on the verge of bankruptcy, and many more have remained open only by putting off renovation and repairs or because, in small towns, they are ancillary to other businesses, and are run in the hope that one day the situation will be different.
I hope that my right hon. Friend, unlike his colleague at the Board of Trade, will not trot out the absurd statistics that we have so often had about the precise number of closures which have taken place. My investigation tells me that that is not a measure of the case by any means. A large number of people, being prevented from doing renovations and repairs, have hung on, in many cases running the cinemas ancillary to other businesses, managing to keep in being, hoping not only that they will help British film production hut that one day some Government will help them out of their jam. The fact that that is so and that the numbers of closures have not been any greater is to their credit. The figures of closures should not be quoted as a reason for the smallness of the problem.
I want to give the example of a smallish cinema seating about 600 people. The takings for 13 weeks were just under £2,000, which represents a gross £153 per week. Of that, tax took £43. That left a net £110. Costs, including film hire, wages and all the overheads, came to £157 per week. This meant a net loss of £46. The loss was reduced to the extent of £14 by a profit on ice cream and sweets. This is a true case. I have been given the audited figures. To quote the letter giving me this information:
 In other words, in order to supply the Exchequer with £43 per week in entertainments tax. our business has had to be run at a net loss of £32 a week.
That case, in my judgment, puts the position fairly clearly.
6.30 p.m.
I always argue, and I will argue again now, that it is absolutely essential that, if we are to have a healthy film industry,

it should have a sound home base. That is not peculiar to this industry; it is the subject-matter of all industries. If the industry is to spread and bring in dollars from increased exports, it must have a firm base to develop here at home. I think that if we are to see the cinemas lose hope—and they will do so very soon unless something is done—we shall have a reduction of exhibition points in this country which will result in less capacity for British films to finance themselves to a very large extent upon the home market, which is their principal and great difficulty.
Now I come to the British Film Production Fund. I am very glad that the hon. Lady the Member for Flint, East drew attention to the very close link between the Entertainments Duty question and this fund, because the position is serious. The film industry must know in advance what is going to happen, because the present voluntary scheme comes to an end in 1957. There is no doubt that, after allowing for a little bit of threats and pressure and discounting that —let us be quite fair—it is the absolute fact that many exhibitors will not legitimately have the right to volunteer to go into the scheme unless they are assured that the industry will be healthy and taxed less.
We know only too well the difficulties of film production and exhibition in this country as compared with the United States. The tax here is 32–6 per cent. of the gross takings, or as the Americans put it 50 per cent., and against that or on the earlier basis in America there is a 10 per cent. tax. I gave an instance in the debate on the film industry on 10th February, and I will give it again now, because there were not so many hon. Members present on that occasion. If we take a major British film drawing £600,000 in Great Britain, it will pay about £120,000 in Entertainments Duty, whereas in America the same film pays £60,000.
That is an enormous difference of £60,000, and when it is sometimes said that British films do not do as well as they should do in the United States, no one who has studied the matter has very far to look for one of the substantial reasons. Of course, it is a case of propaganda and advertising to some extent, when we compare how they advertise over


there with what we can do, but they can afford to do it.
If the industry is bled white at the source, how can it hope to expand and have money to spend in other countries to the great benefit, not only of dollar earnings, but, by being in a healthy state, in producing the films that are wanted here, thereby saving dollars to this country? I think that that is sufficient for me to say on that matter.
In conclusion, I applaud and want to pay my tribute to the work of the All Industry Tax Committee of the Film Industry. I think it has made out a first-class case, and that that case for massive reductions in the Entertainments Duty is absolutely sound, but that it is impossible for economic reasons at the present time. The industry has a first-class case, the sort of case which, if conceded, will put this industry on its feet, and stop all the talk about subsidies and all the rest, much of which talk is idle, anyway.
It is the fact that that case, if granted, will substantially reduce the Entertainments Duty. It will reduce it approximately from 32–6 per cent. to about 12–1 per cent., combined with a modest but quite useful increase in the production levy. I support that case, though I feel that it is impossible to concede it now, and I do not press it in any degree whatever, but I would ask my right hon Friend to take account the case of the small cinemas which has been so adequately and sympathetically made out from both sides of the Committee today. because they really are in a serious plight.
Some of us have had a look at them, and have been investigating their position and examining the figures, as I have done so, for one. This is not a case of propaganda or of sentiment, but of a genuine piece of hardship and of injury to the whole film industry. If we lose these points of exhibition, they will not come back, because nobody will be prepared to do that. They will say "I have had my lesson; I am not going to have another go."
It just happens that there is perhaps a lack of faith, which was demonstrated in the winding-up speech in the debate on 10th February, and I was not very much cheered by it myself. That speech and also the various comments made since have made it quite clear up to date that

there is not much hope of the Chancellor of the Exchequer moving favourably in this matter, and the circuits have anticipated it to a certain degree. Because of this situation, there is still a genuine opportunity of helping the smaller exhibitor in particular,
It may not be the most popular decision, for the simple reason that the circuits will not get very much out of it, but we ought not to consider the profits of one section of the industry against the others in this matter. We have to think of trying to ensure that the film industry gets a fair deal. That fair deal can be given it, and I trust that it will.

Mr. E C. Redhead: I make only a brief intrusion into this discussion in order to embellish what has already been put forward as a very strong case on behalf of both the cinema industry generally and particularly the small cinemas. I share the hopes which have been expressed today that, on the Report stage, at any rate, the Chancellor will find it possible to give effect to the purpose of these new Clauses.
I fully admit that, as regards the small cinemas, the second of the new Clauses presents obvious administrative difficulties, which its supporters themselves have acknowledged. The third new Clause would in itself do something to give relief in that direction, but one has to point out that it would still be productive of anomalies. While expressing the very earnest hope that the Chancellor will be able to give effect to the purpose of this new Clause, because I believe that his advisers, with all their ingenuity, will find it possible to devise ways of meeting that purpose, I ask that the Chancellor should direct his attention to what I believe is the fundamental cause of the disquiet about this duty on the part of the cinema industry.
The blunt fact is that this duty, introduced 40 years ago, has now been so nibbled away by a whole succession of complex concessions, exemptions and various scales that it has now produced a situation which leaves the cinema industry making a contribution of about £35 million out of the total revenue of £41 million from this important duty. Therefore, if the Chancellor can meet the demands made in the discussion today, I do not suppose that he will delude himself into thinking that all his troubles are at an end.
I suggest most earnestly, and as a requisite approach to a fundamental review of the whole of this duty, that he should look at the whole basis of it in relation to what was introduced 40 years ago, which was a relatively simple duty, but which has now become an administratively cumbersome piece of machinery which is out of all proportion even to the total revenue that is derived from it. We have now not only three scales of duties, the highest of which falls on the cinema industry, but eleven statutory headings of possible exemptions and one repayment provision, hardly any of which can be brought to aid the cinema industry, with the possible exception of one relating to indoor entertainments in rural districts.
The whole business is bound to be one in which, so long as it is treated piecemeal, will meet, as it has met over the last few years, continual pressure from first one interest and then the other upon the Chancellor until what is produced is a thoroughly inequitable result. I urge the right hon. Gentleman, in approaching these matters, either in relation to this or to the long-term view, to bring into review the whole of the duty, and to produce something which would be more equitable and administratively more simple in ordinary practice.
My sympathy is extended not only to those who have brought forward this new Clause, but to those who have had to grapple with this duty in all its complexities. At another time I might have had to declare my interest, but, that no longer being so, I can say that, having struggled with this duty in administration for five years, my sympathy is equally extended to those who try to manage it today. I hope that the Chancellor will look at this problem fundamentally to see whether he cannot find an entirely new basis, one which is workable, administratively simple and efficient and, at the same time, equitable to all concerned.

Commander J. W. Maitland (Horn-castle): I want to add my plea to that put forward by my hon. and gallant Friend the Member for South Angus (Captain Duncan) in support of the small cinema. Every year, like my hon. and gallant Friend, I write to the Chancellor and put the figures before him, but no answer is forthcoming. This is the most inequitable thing which I have never been

able to get put right. I want to draw attention particularly to the formula through which small cinemas get some benefit, and which was mentioned by my hon. Friend the Member for Honiton (Mr. Mathew).
To give one example of the sort of anomaly which exists, if the boundary of a very small urban district is drawn close and tight, then a cinema in that district, however small it may be, may get no benefit. Next door, there may be—and there is in my constituency—a large, flourishing and go-ahead seaside resort which is still an urban district, but whose territorial boundaries are widely drawn, so that it is just able to keep the benefits for its cinemas. That is obviously and demonstrably not fair. It was not for that that the formula was designed.
As my right hon. Friend must know from having examined the figures, some small cinemas are really on the verge of closing. If they do close, it will be very difficult to get them going again. We shall get through our troubles and a good time will come, but when that good time comes I do not want to see cinemas in the small country towns in my constituency closed because my right hon. Friend could not understand. They are cinemas serving a large, hard-working, rural population.

Mr. A. E. Hunter: I rise to support the new Clause standing in the name of my right hon. Friend the Member for Huyton (Mr. H. Wilson) and my hon. Friends and myself. Everyone will agree that not all cinemas are in Leicester Square and not all cinema owners have large offices in Wardour Street. Many small owners are facing a very trying time today. Some of the large and powerful circuits have grown from small beginnings. Some are backed by American finance and by American film companies and are in a very strong position from the very fact that they often have the first releases of films, have central buying agencies, have the technicians and the new ideas such as CinemaScope and Cinerama and the other inventions which have come along in the last two or three years. These can well look after themselves, for some are of an international character.
However, owners of small individual cinemas in small towns, often in mining


areas or agricultural and urban districts, sometimes even on the outskirts of London, or some of the new towns now springing up in the Home Countries, are facing a very severe time. During the last 40 years or so, the cinema has become an established part of the British way of life. I can remember—no doubt other hon. Members have similar memories—that as a small boy I used to go to Saturday matinees when ld. was charged for admission. I see that my hon. Friend the Member for Tottenham (Sir F. Messer) is nodding in agreement.

6.45 p.m.

Sir Frederick Messer: That was all I could afford.

Mr. Hunter: In those early days, there was generally a piano being played and there were generally films about cowboys and Indians. We have moved very far from those days, but some small cinemas, although not showing "Redskins" and cowboys today, are still showing films and providing a useful service in entertainment in districts where the population is not large.
The Entertainments Duty was introduced during the First World War and it was suggested by the Chancellor of the day and the then Financial Secretary that it was a war emergency measure, and that it would be abolished as soon as possible. We have gone through the Second World War, another 11 years have passed, yet Entertainments Duty is still with us. I. do not want to weary the Committee with figures, but attendance figures have dropped alarmingly in the past few years. The peak figure for attendance was in 1946, since when there has been a very marked decline, reaching its lowest level in 1955. The Chancellor should make a concession to help small cinemas, for many have closed down in the last 12 months.
Last February we had a debate on the film industry which was initiated by my hon. Friend the Member for Govan (Mr. Rankin). From all parts of the House sympathy with the small cinema owner was expressed. In small country towns with populations of 8,000 to 10,000 one often finds that a cinema owner is a kind of working manager, often with only one assistant. One hon. Member has referred to the selling of chocolates, sweets and

ice cream, but some cinemas are so small that they cannot afford the overhead charges involved in employing staff to sell sweets and chocolates which the large circuits admit to be one of the main sources of their profit.
It is for small cinemas especially that we are making this plea to the Chancellor. Small cinemas lack the capital which they often need for re-seating, new carpets and other things. It is not technically possible to introduce Cinema-Scope, because the cinemas would have to be substantially enlarged. Some owners of small cinemas are operating at a loss hoping to keep the cinema as a going concern. Others, even as owners, draw a wage of not much more than £10 to f12 a week. A reduction in Entertainments Duty will help small cinemas which are still a feature of the community life in British towns and village.

Mr. John Baldock: Like other hon. Members, I have had the opportunity of looking into the figures and accounts of some of the smaller cinemas. There is no doubt whatever that anyone examining them from an unprejudiced viewpoint must be firmly impressed with the extreme difficulties from which they are suffering. Those which have already gone out of business are the most eloquent proof of the pressure which is put upon them, and many others, as hon. Members have already said, were simply hanging on for the Budget or in the expectation of something being done for them in a very short time. I am quite sure that if nothing is done many more of these cinemas will be out of business before this time next year.
This is a somewhat different matter from the ordinary changes of taste and of the economic facts of life. It is not simply a case that people no longer want to visit the small cinema or have lost the inclination to do so. One must admit that if economic circumstances or public taste changes, various forms of entertainment, amusement and business must inevitably disappear. That is not quite the case with which we are dealing. It is the pressure of taxation which is extinguishing the small cinemas. It is not simply a question of economic changes or changes of taste, but it is something about which the Chancellor of the Exchequer can do something.
My hon. Friend the Member for Honiton (Mr. Mathew) has put forward a proposal which would help some of the rural cinemas, and I would welcome it, but the proposal by my hon. and gallant Friend the Member for South Angus (Captain Duncan) appealed more to me in that my hon. and gallant Friend's suggestion that a certain low level of takings should be exempt from taxation would help all small cinemas, whether in the town or countryside or anywhere else. They are all feeling the position equally badly, and in my view the small cinema has a case for existence.
In small towns, why should there be only one enormous cinema which is able to keep going? Why should the citizens of small towns not have the same right of choice as people in the big towns? Why should they not be able to visit the small cinema as well as the Odeon or other large cinema which is able to make a success? They could do so if some relief were given to the small cinema.

Mr. R. Moss: I wish to refer briefly to my own constituency, which is composed of three rural districts, with the City of Coventry on one side and the City of Birmingham on the other side. The constituency of Meriden, therefore. is composed of a multitude of small towns and villages and in these small centres of habitation there are small cinemas.
I do not intend to say anything about the general case for tax relief in the cinema industry. I consider that that case is sufficiently proved and has been excellently put by my hon. Friends and by hon. Members opposite. I have, however, done some research in my constituency and I should like to tell the Chancellor of the Exchequer what results I have found.
My first example is that of a cinema in a mining village remote from any large centre of population. I have looked at the day book which is kept for this small cinema and I found that on Saturday, 19th May, 1956, the total attendance was 310, the gross takings £15 8s. 10d. and the tax £3 Os. Old., leaving net takings on that occasion of £12 8s. 91{1. On Thursday, 19th April, this year, the total attendance was 40, the gross takings £2 7s. 10d., tax 9s. 101d. and the net takings, therefore, £1 17s.On whatever day I looked, I found that 20 per cent. of the gross takings and 25 per cent. of the net takings were always taken by taxation.
I next looked at two small cinemas in a small town not far from the City of Coventry. One of these small cinemas has already gone out of existence and the other is in great difficulties. I discovered the interesting fact that, over the past six years, these two cinemas have paid nearly £40,000 in tax and have made a profit of £1,743. The admissions in 1953 numbered 154,000; in 1954, 138,000; and in 1955, 131,000, thus showing a decline of 15 per cent. over the period.
I ask myself whether it is worth while for small cinemas to be preserved in small communities. I appreciate that, when competition is present, an enterprise might have to go out of existence. In considering the justification for maintaining small cinemas in small towns and villages, however, I find, first, that the police welcome their existence because in their opinion these cinemas play a great part in the entertainment particularly of young people, who might otherwise be a nuisance to the police if left on the streets. I found, also, that these cinemas are a source of entertainment and relaxation to workers, particularly those who have spent the day in the mines, and give them an opportunity to see on the screen the wider world of which they see so little at their daily toil. The small cinema plays an important part in the life of a small community, and every effort should be made to keep it in existence.
The small cinema, however, is today faced with peculiar difficulties. The hon. and gallant Member for South Angus (Captain Duncan) spoke of the wages which are paid in small cinemas. In my constituency, wages have to compete with wages as they are in the City of Coventry or the City of Birmingham, and no small cinema proprietor can engage labour unless he pays above the national scale. This presents a difficulty which is perhaps peculiar to areas of that nature.
Small cinemas are also losing revenue because of their inability to install modern apparatus. This aspect has already been mentioned in the debate. I am told, however, that the cost of this apparatus is the same for the small cinemas as for the large ones and, therefore, the overheads are relatively greater. I am told also that the transport costs are heavier for small cinemas because their programmes have to be changed frequently. Heating costs are higher in the case of small cinemas because of the


reduced amount of showing time, which in the case of one small cinema I visited was 2 hours a day.
Another point to be borne in mind is that small cinemas have to employ subsequent runs. Frequently, local people who have, perhaps, made the journey to a neighbouring city for the purpose of shopping, have visited a cinema while there, and on a later visit to the village cinema they find that they have already seen the film which is being shown. Subsequent runs are the fashion in small cinemas and they lose the marginal custom which in their case is extremely important.
I think we all know that the small cinema is in great difficulty today, and repeat that there could be no stronger case than there is for relief of tax in the cinema industry and for the small cinema in particular. I beg the right hon. Gentleman to consider the social grounds which make it worth while to keep in existence the small cinemas which operate in the towns and villages of Britain.

7.0 p.m.

Mr. William Shepherd: I think that my right hon. Friend has heard a good deal of very emphatic pleading this evening for a reduction in cinema taxation. There are always claims for reductions in tax. Some of them have more validity than others. I think that there is undoubtedly room for the view that the Government have today and for some time past been taking more out of this industry than it can really afford.
We have to accept the view that if an industry can bear a tax it must be taxed, but we have reached the position in the cinema industry in which it is now bearing a tax higher than is practicable for all purposes. Whether my right hon. Friend can do anything about it on this occasion or not is a matter to be seen, but I would impress upon him that this is a matter which cannot be left over for more than another year. The situation is altering very rapidly, and much of the durable equipment in our cinemas is below the level which the customer is entitled to expect. Many of the wages are below the level that any decent person wants to pay, and this is largely due to the somewhat avaricious nature of the Treasury.
Things have changed and it is true that there is a big reduction in the extent of the attendances. One could, of course, overstate this, and I do not want to overstate the case tonight, but to qualify something which my hon. Friends have been saying. It is very fashionable for industries, when claiming tax reliefs, to make great claims about the trouble they are in. Industries claiming tax relief are like cowards, they die many times before their death, and no doubt the hardened officials of the Treasury are accustomed to hearing these stories.
It is perfectly true that, whilst there has been a substantial reduction in attendances, nevertheless attendances today are 50 per cent. higher than they were in the average years before the war. so we are not really dealing with a dying industry in that sense. We are dealing with an industry which has materially improved its position over a period of years. despite the fact that there has been many more forms of competitive entertainment.

Mr. Donald Chapman: I am very interested in that figure. Do these attendance figures relate also to the small cinema?

Mr. Shepherd: I will come to the small cinema in a moment, because I think that we want to go into the position of the small cinema a little more carefully than has been done so far. The big circuits, as everyone knows, are enjoying a period of what looks like prosperity, according to their balance sheets. As they have put their prices up again, I imagine that they will produce a somewhat similar result next year. But the small cinema is definitely in a difficult situation. I want to deal for a moment with the small cinema, because that is the issue before us.
I dissent from the view that one can save the small cinema entirely by tax reduction. In the first place, there are today nearly 200 more cinemas than there were before the war. There are about 1,080 or 1,050 compared with 890 or 870 before the war. During the war, a large number of cinemas were equipped and opened because one could pack almost any kind of house. I do not believe that we can keep open all the cinemas we have today. I doubt very much whether it is in the interests of the industry to do so. I have stated already


that they have increased by about 200 during the wartime period up till today. The curious thing is that, despite the fact that attendances have fallen on an average by about 8 million per week from the peak, the number of cinemas has not materially reduced.
There is no doubt about it that we have too many small cinemas in this country and they are contributing in a measure to the lower standards that we have in our cinemas. There are too many people trying to get the custom that is available. This is a matter entirely of facts, because standards have altered. The man or boy who could afford only a few pence to go into what was called the "flea pit" before the war, now has the money to go into a decent cinema with fairly good equipment.WON. MEMBERS: "011.1 Oh, yes, by and large he wants to go into a place that is better, and one does not blame him for that. We all try to improve our standards, and we must not object if the cinema-goer tries to improve his standards as well. Therefore, there is no doubt that we have too many small cinemas. in particular those seating 500 or under.

Mr. F. H. Hayman: How many of these small cinemas are already exempt from tax?

Mr. Shepherd: I think there are very few, because rural exemption is very difficult to operate, and I am not sure that that is the right way to do it. I am not at all happy about rural exemption. It is true to say that these cinemas are not now catering effectively for the class of customer which they had before the war. I have every sympathy with the small cinemas, and I am not suggesting that we should not do something for them, but I am asking. the Committee to have regard to the real facts of this case.

Mr. Edward Evans: The hon. Member says that there are too many small cinemas in the country. That may well be so, but is not that due to the fact that these cinemas are placed in centres of very small population, and if we ask people, because they earn more money, to go to the bigger cinemas, where are they to go? They have to go to the big towns, which may be a considerable distance away. I consider that

these small cinemas play a very important part in our social life.

Mr. Shepherd: The hon. Gentleman has anticipated me, because 1 was dealing in a general sense with the small cinemas. The problem divides itself into two classes of small cinemas. One, I think, is socially wholly desirable, and for the others there is much less to be said. In small localities where the small cinema is the only amusement open to people, I think that its preservation is absolutely vital. I do not think that the cinema which is sixth, seventh, eighth or ninth in a relatively fair-sized urban town is anything like as vital to the community. I think, therefore, that we have a problem which is difficult to solve from the fiscal point of view by encouraging one without necessarily encouraging the other.
The small cinema has a further difficulty at the present time, in that the pattern of cinema-going has been very much affected by television to the extent that, whereas before the advent of television in any strength it was the case that one got a fair return from an ordinary film, and a fairly good return from a good film, and no return on a bad film, today the audience is much more selective. If one has an ordinary film today in an ordinary cinema position, one can be almost certain to lose money; but if one has a very good film one makes more money than ever before. This places the small cinema in a particularly difficult position, because it can usually get only re-runs—probably third, fourth or fifth re-runs. There may be bars making it difficult for it to get any value at all.
I raised this matter three or four years ago before the tax remission was given, and I tried to tell right hon. and hon. Gentlemen opposite, the Board of Trade and others of my own party that we must have some system of relief which would help the small cinema. At that time there was not quite as much interest in the small cinema as there is at present. For those who took some interest in the industry, the writing was clearly on the wall for small cinemas some years ago. It is a great misfortune that at that time the cinema industry did not rally round to support the small exhibitor and suggest some assistance to get him out of his troubles.
I have given my views on the small cinema, because I think we have been a little too generalised in our comments. In the small cinema there is something of special social value, particularly in the rural areas. I want to see it encouraged, although I do not think the best interests of the industry will necessarily be achieved by maintaining exactly the present number of small cinemas.

Mr. Hirst: I follow my hon. Friend's argument, but surely if this were so it would be fair to say, "Let it be closed for economic reasons under sound and fair conditions of taxation"?

Mr. Shepherd: I would perhaps go even further; I am prepared, as I was three or four years ago, to let these cinemas have some preferential taxation treatment, because undoubtedly they fulfil a strong social purpose in rural areas.
The point with which I want to leave the Committee is that, even if we give them tax preference, I do not think all these small cinemas will remain open. I believe that there are social and economic reasons for which they will not remain open, but I urge my right hon. Friend to give consideration to the position of this industry. Whether we wish to maintain the existing cinemas or not is an open question, but what is not open is that the present volume of taxation which this industry is bearing is too heavy for all purposes. I ask him to give the matter urgent attention.

15 p.m.

Mr. E. L. Mallalieu: At this late stage in the debate I will occupy the time of the Committee for only a short time. I want to speak for a moment about small cinemas in the less populated areas. It may well be true, as the hon. Member for Cheadle (Mr. Shepherd) said, that not all existing small cinemas can remain in existence, but what seems to me to be quite stupid is for the coup de grace to be given by right hon. Gentlemen opposite, and indeed in some measure by their predecessors, when, according to the views of all, these small cinemas serve socially a useful purpose.
We had the same thing earlier today, when we were discussing the finances of Covent Garden. I will not go into that in detail, but as a matter of reference I might point out that we give available

financial resources always to the big centres of population. Of course I want Covent Garden to receive the money, but I also want a fair share to go to the outlying areas which are not near a large town. If this taxation is continued, we shall, in my submission, not see this fair share. It may be that we shall not see it in any case, but at any rate let us not give the coup de grace to these outlyingcinemas by continuing the imposition of penal taxation.
It is often said that these cinemas must try to sink or swim according solely to economic circumstances. It is often said that they should raise their prices. What is the use of them raising their prices in these circumstances when so much of the price increase which they impose upon their customers goes straight into the coffers of the Chancellor? It seems to me that if we want these small cinemas to exist we must give them a chance to exist, if they have the economic strength, and not push them over the edge with penal taxation.
Television is no doubt in a large measure responsible for the losses which many cinemas are suffering, and it may well be that this comparatively new method of entertainment, which I welcome as a great boon to the countryside, will finish off the cinema, but let us not add to the difficulties of the cinema with penal taxation. I do not know which of the methods suggested in the new Clauses is right, but I suggest that it is the duty of right hon. Gentlemen, who have expert advice and experience at their beck and call, to find out and to tell the House of Commons the method by which we can achieve the results which hon. Members on all sides of the Committee obviously wish to see.
I want to ask the Chancellor two questions. Does he admit that at present the smaller cinemas, particularly in the more rural areas, are having a very hard time and are likely to go out of existence progressively if the present system of taxation is continued? Secondly, does he want it to happen? If he does not, will he make a proposal, even if the proposals embodied in the new Clauses will not achieve their purpose, which will give the smaller cinemas a chance of carrying on?
It is not enough for him to pick holes in the new Clauses. Let the Chancellor


bring forward a scheme of his own, if these are not enough, for it is obviously the opinion of the Committee that the smaller cinemas, particularly in the rural areas, should not be put out of existence by any disadvantage from taxation.

Mr. William Yates: We have heard the arguments for the preservation and retention of the small cinema as a social necessity. Some hon. Members have said that perhaps the small urban cinemas are not necessary and should be put out of business. That is what this taxation is doing. Another hon. Member was anxious to have the maximum number of exhibitor points for the British cinema industry.
I am no expert in these matters, but I am interested in a definite injustice, and when a complaint reaches me about taxation—and we are here to protect people from the hands of the Revenue officers—I look into it. I therefore sent to the Financial Secretary of the Treasury the audited accounts of certain cinemas in the Wrekin area. As the Budget was in preparation, he simply returned them to me with due courtesy and invited me not to anticipate the Budget statement.
I am now in a position to ask him to appreciate what I have to say, and I want to put it quite clearly and without undue bias one way or the other. I agree that we should have fair competition, but what of a situation like this? I have a letter which says that the Regent Cinema, Wrockwardine Wood, and the Regal Cinema, Hadley, both pay full tax. Yet within two miles the Garrison Theatre—The Globe, Donnington—which seats about 1,000 persons, does not pay Entertainments Duty at all. It is an A.K.C. cinema, admitting, it is claimed, all people of the area and it does not pay tax at all.
This is just a method of slaughtering the small cinemas, and I shall not remain here without pleading that before the Report stage the Financial Secretary should, with his right hon. Friend, try to work out a method of taxation which would benefit this industry and help to maintain the small cinemas in business. I am not anxious for my right hon. Friend to lose revenue—I am not interested in that—but only anxious that he should try, before the Report stage, to present to the House sensible, logical proposals to protect the British small cinema industry.

Mr. Chapman: If I may say so, the most interesting speech we have had so far has been from the hon. Member for Cheadle (Mr. Shepherd). He tried to be very balanced, but I felt that in the end he overlooked in particular the case of the small cinema in the urban area. I rather sensed from his remarks that he dismissed them as those that will, of necessity, go out of existence, and that he did not really care if they did.
I want to speak of what happens in constituencies like mine. I live in a constituency which is one huge suburban sprawl on the edge of a great industrial town. In it I have a small chain of three cinemas, two of which are likely to go out of existence in the next 12 months. Why are all those cinemas important? Because, in a city like mine, the only alternative to visiting them is to travel for half an hour or three-quarters of an hour on a bus to a cinema in Birmingham. That is the first reason, and the second is that for many, and particularly for elderly folk and for those at the other end of the scale, it is what might be called that easy night out just round the corner. To that extent, such cinemas serve a useful social purpose in a suburb.
The third point about these suburban cinemas is that they cannot come in for the sort of help which the hon. Member for Honiton (Mr. Mathew) wanted to give them. It is no good offering my, suburban cinemas in Birmingham something based on population per square mile. On that basis, we shall never come within the sort of exemptions he wants. The only possible way in which this can be done is to treat the cinema industry on the basis either of its profits or of its gross takings.
In cinema industry taxation we are in very grave peril of extending what we in this Committee all know to be the existing danger. We always know that once a tax is put on it is the devil of a job to get it taken off, but it is now becoming the dickens of a job even to get it reorganised. What is really needed for the entertainments industry, and for the cinema section in particular, is to shift the burden of taxation from those who cannot bear it to those who can—inside the same industry, if necessary, and. therefore, without loss of revenue to the Chancellor.
Has the attention of the right hon. Gentleman been drawn to the typical takings of the small cinema? The small cinema today takes about £150 to £170 a week. I know that he will plead that it is not taxation that forces them out of existence, but he really cannot say that taxation is not making a difference to their existence, because out of takings of that order about £60 goes in taxation. In constituencies such as mine that means all the difference between existence and non-existence.
I ask the Financial Secretary to look at this problem in the broadest sense of the figures relevant to the industry. If he looks at the cinemas making a loss today, this is what he will find. Nearly half of them have less than 750 seats. Three-quarters of those that make a loss have a most-popular seat priced at under 2s. Three-quarters of them are in the suburbs and the small towns, and from half to three-quarters have gross takings of less than £150 a week. What it amounts to, as my hon. and learned Friend the Member for Brigg (Mr. E. L. Mallalieu) has said, is that it is Parliament that, by taxation. is totally distorting the economic situation in which those cinemas are placed and is itself forcing them out of existence.
I have no objection to purely economic forces pushing them out of existence, but what I do object to—and I think that it is a legitimate objection—is Parliament administering the final blow which kills them. That is what is going on in the small cinema industry today. I hope that the right hon. Gentleman, even if he cannot promise any revenue relief, will at least, for once, offer a reorganisation of the tax on entertainments.

The Financial Secretary to the Treasury (Mr. Henry Brooke): This has been, to me at any rate, an extremely interesting debate. For the last two and a half hours we have discussed the cinema industry with a remarkable freedom from party bias. Hon. Members may say that they have all ganged up against the Treasury. Well, it will not be the first time that that has occurred, and certainly it has been done in a very pleasant spirit. I hope that I have suited the wishes and the convenience of the Committee by waiting until the majority of those hon. Members who showed at the outset a

desire to take part in the debate had spoken, so that I could be sure that I had heard a representative selection of views from all quarters.
In view of the fact that at least the first two of these new Clauses have been commended to the Committee, not on the grounds that they are perfect in themselves, but simply because that was the way whereby, in accordance with the rules of order, the general idea could be put forward, I am not proposing to spend much time meticulously examining every word and every figure they contain, but rather to address myself to the more general issues that have been raised, and to seek to answer a number of the material points which have been adduced.
One point on which a number of hon. Members on both sides have spoken is the future of British film production. That is an extremely important subject. We had a debate on it on a Friday not so very long ago, and I myself heard a good part of the debate. I came here purposely to do so. The future of the Eady levy is, of course, a matter for my right hon. Friend the President of the Board of Trade. He is well aware that the present term of the levy expires in, I think, 16 months' time, and in due course he will reach and announce his conclusions on that matter.
When some hon. Members suggested that the kind of changes which are outlined in these new Clauses would redound powerfully to the benefit of British film production, I think that I must sound a cautionary note. It is the same cautionary note that was sounded by the right hon. Member for Huyton (Mr. H. Wilson) in this House on a date, curiously enough, five years ago to the very day. He then pointed out that, other things being equal, out of any remission of duty not much more than one-tenth would be likely to go back to the British film producer. I do not for a moment minimise the importance of one-tenth; I only wish to record that that is not a main issue in the general subject of the future of the Entertainments Duty which we are discussing today.

7.30 p.m.

Mrs. White: Would the right hon. Gentleman not agree that, while the financial effect may be as he described it, the psychological effect might be considerable?

Mr. Brooke: I am far from saying that it would have no effect, but the future of the British film industry is a much wider matter than that, and any decision reached by way of some slight alteration in the Entertainments Duty will not mean life or death for British films.
The general situation of the cinema industry is this. Takings, exclusive of duty, have remained generally stable over the past five years or so. It is perfectly true that there was a 7 per cent. falling off in attendances in 1955 compared with the previous year, but, as I think all hon. Members familiar with the industry will know, one must not spring to conclusions from short-term movements like that, which may depend upon the weather or the season. A fine summer keeps people out of doors; it puts up the sale of ice cream but puts down cinema attendances and the sale of toffee; a very cold and foggy winter may have its effect, and so forth. For that reason, I would deprecate anybody seeking to draw far-reaching conclusions from any short term change in attendances.

Mr. Hirst: If rny right hon. Friend will forgive my intervening, I cannot accept that as quite a true picture. If we take it on a weekly basis, the drop has been something of the order of 8 million since 1946, and it has been 21 million every single week since 1953. That is not a short-term basis.

Mr. Brooke: Though I do not wish to quarrel with my hon. Friend, when he refers back to 1946, I must remind the Committee that in 1946 attendance at all sorts of entertainments was extremely high because of the lack of other things on which to spend one's money.

Mr. Hirst: We have the figures since 1953 also.

Mr. Brooke: On all occasions when I have received deputations from various branches of the entertainments industry, including the cinema, they have all quite frankly agreed with me that those immediate post-war years were exceptional because of the special difficulties of the times and the relatively narrow choice of things on which money could be spent, and it is only in more recent years that we have got back to more normal, conditions.
As my speech goes on, the Committee will find that I am not seeking to prove that all is well and that no further attention needs to be paid by Parliament to all these matters; but the black side of the case has, on the whole, been put by hon. Members wishing to prove their arguments for a reduction in duty, and it is only right that I should put before the Committee other facts which also must be taken into consideration.
One of those facts is that cinema attendances per head per annum are still much higher here than in any other country in the world, and higher by a very substantial margin. The British public is not showing signs of losing the cinema-going habit, though I grant entirely to my hon. Friend the Member for Shipley (Mr. Hirst) that the trend is moving downwards.

Mr. Chapman: Hear, hear.

Mr. Brooke: The problem of the industry is that of rising costs, and it is by no means the duty which is the only cause of cinemas getting into difficulties. Quite naturally, when any cinema does get into difficulties, its proprietors look first of all at the rake-off which the Chancellor gets and spring to the conclusion that their problems would be greatly eased if they could get that load off their backs. All of us would do that; it is perfectly natural. But even if the Entertainments Duty on the cinema were miraculously removed altogether, and the Chancellor found he could forgo tens of millions of pounds of Revenue, the cinema industry, though it would have a wonderful day, would still not shake off all the problems which it has to face.
I had the pleasure of receiving on behalf of my right hon. Friend, a deputation from the All-Industry Tax Committee on 22nd February. That deputation helped me by bringing an interesting written memorandum, which I and my right hon. Friend have studied with great thoroughness. I noticed that the hon. Lady the Member for Flint, East (Mrs. White) said she could not go so far as the industry itself in urging upon Parliament that the present duty collected of some £33 million should be reduced to some £13 million. She was not asking for anything of that kind. But it is of value to have all these figures collected, and we are always seeking to inform ourselves more and more


fully about the affairs of the industry. I realise that it must have been a disappointment to the industry that my right hon. Friend the Chancellor did not feel able to mention Entertainments Duty in his Budget speech as a field of taxation where he could make any concession.
What has happened in the industry since the Budget statement is that the leading circuits have accepted that, if rising costs cannot be met out of existing profit margins, then they must be charged to the public in higher prices. At any rate, I take it that that is the reasoning which lies behind the announcement that next week prices in the circuits are to go up. The hon. Member for Govan (Mr. Rankin) said that this would produce some £13 to £14 million extra, gross, of which less than £6 million would accrue to the industry itself.

Mr. Rankin: That leaves £7 or £8 million for the Treasury.

Mr. Brooke: I am not forgetting what the Treasury will get. The hon. Lady the Member for Flint, East on the other hand, said that the industry was not expecting any gain to itself from higher prices. I feel that a comparison of those two statements by well-informed hon. Members, and the contrast between them, proves how impossible it is to forecast with certainty what the effect of higher prices will be during the remainder of this year. The industry has decided on this. I cannot say how far independent cinemas will follow the lead of the circuits. Time alone will show what effect it will have on attendances and on the economic state of the industry generally. We must see how it will work out, and any forecast that I, or any hon. Member, sought to make today would be purely speculative.
A great part of today's debate has centred upon the small cinema. It is the small cinema, referred to in the second of these new Clauses, which has particularly engaged the attention and sympathy of hon. Members on both sides. The fact is that some small cinemas are doing badly and some large cinemas are also doing badly. We have examined this matter as closely as anyone who is not in the industry can and have found that it is quite impossible to draw a line of demarcation anywhere and say that cinemas with a seating capacity below

that line are generally doing badly and not making a profit, while those with a capacity above the line are doing well and are not afflicted with problems.

Mr. Chapman: There are very definite figures upon this matter. If we take the number of cinemas showing losses in their balance sheets, we find that nearly half have less than 750 seats and three-quarters had less than 1,000. There are figures in connection with every aspect of the problem.

Mr. Brooke: The hon. Member imagines that I am seeking to prove more than I am. I am not seeking to prove either that there is a lack of information upon this matter or that small cinemas are not meeting difficulties. I said that we could not say that all cinemas below a certain size were unprofitable, or that all cinemas of a greater size were profitable. The problems of the industry are felt by cinemas of all sizes, though I agree that small cinemas generally feel them more.
The second of the proposed Clauses we are discussing takes a weekly turnover of £350 as the criterion—but a turnover of less than that sum per week is not in itself evidence of hardship. Hon. Members have spoken of cases in their constituencies, and I would not for a moment seek to deny the truth of their figures. On the other hand, it is likely in the normal course of things that hon. Members will have been shown the figures of the less successful cinemas in their constituencies. It is natural that anybody interested in a certain part of the country is likely to be given a picture which is just a little darker than is the real situation.
The Clause suggests that we should, in effect, change the law for the benefit of the small cinema. On the other hand, if two cinema proprietors draw the same income—Mr. A from two, three or four small cinemas and Mr. B. from one large one—it is not necessarily proved that Mr. A. should be the one to receive tax relief, as against Mr. B. Small cinemas are not alone. Many small undertakings of all kinds are facing difficulties in the twentieth century.
Hitherto we have not shaded our revenue from taxes on these grounds. We do not charge a lower tobacco duty to small tobacco factories.We do not


charge a lower beer duty to small breweries. [An HON. MEMBER: "What about Income Tax?"] Lower Income Tax for small incomes is a different matter. Several hon. Members have made the point that Entertainments Duty is not a tax upon income. That is precisely why I am saying that it is difficult to justify special concessions which have no relation to profitability but are solely dependent upon size. My hon. Friend the Member for Cheadle (Mr. Shepherd), in his very interesting speech—although it did not commend itself to all hon. Members—certainly showed a perception of the fact that the problem of small cinemas is rather more complicated than has been suggested by many other hon. Members.
7.45 p.m.
The idea underlying the Clause is an interesting one but, if hon. Members study the matter, I think they will see that it would not work out so attractively in practice as it would seem to do at first sight. It would operate as a kind of concealed subsidy to certain cinemas. The cinema would normally fix its prices upon the basis of the full scale of duty and at the end of the week, according to the amount of takings, the proprietors would retain for themselves part of the tax which they had charged in their prices to the public. It would mean that the man who successfully increased his weekly takings might find that at the end of the week he had put himself into a higher duty scale and that my right hon. Friend the Chancellor skimmed off practically all the benefit which he had been hoping to secure for himself.

Sir Charles Taylor: I think that my right hon. Friend is getting the facts wrong. He talks about a concealed subsidy, but surely he means a concealed relief?

Mr. Mitchison: I have not taken any part in the debate, but I notice that the Clause provides for marginal relief.

Mr. Brooke: All I am saying is that this is not going to be so sensible in practice as it looks when one puts it down on paper. One of the criticisms against Entertainments Duty—and I believe that this consideration was in the mind of the hon. Member for Walthamstow, West (Mr. Redhead)—is that it is already too complicated, and it is also said that the differentials are excessive. But one of

the three proposed new Clauses would entail an additional differential, making it that much more difficult.
I turn for a moment to the third of the proposed new Clauses, upon which my hon. Friend the Member for Honiton (Mr. Mathew) spoke with so much force. The rural areas exemption is based upon a formula which is constantly criticised by people in areas where it works anomalously—and I grant at once that one of the spectacular anomalies is that which exists between Sidmouth and Exmouth. Sidmouth receives the benefit and Exmouth is denied it. I hope that my hon. Friend will accept it from me that, over the country as a whole, the formula works surprisingly fairly.

Commander Maitland:: Not in my constituency.

Mr. Brooke: I know that hon. Members on both sides of the Committee have cause for local grievances in this connection. They are so few, however, that 1 can identify them all. They write to my right hon. Friend and me not infrequently upon the subject. But their very scarcity is interesting evidence that the formula works not at all badly.

Mr. Dudley Williams: My right hon. Friend was saying how difficult it was to work a differential rate of taxation. Is not that in fact what the Clause does?

Mr. Brooke: This is not a differential rate; this is an exemption which the hon. Member for Walthamstow, West would say was a simplification rather than a concession. It is certainly not a simplification for the Financial Secretary when my hon. Friend the Member for Honiton and certain other hon. Members —one of whom has now, fortunately, joined the Government and is therefore silenced, in public at any rate—complain about the situation in their constituencies.
It certainly does not eliminate altogether the difficult marginal cases. My hon. Friend the Member for The Wrekin (Mr. W. Yates) referred a moment ago to certain cases in his constituency. He was bringing them forward as evidence in favour of a general reduction for small cinemas. I was inclined to think that his words might have been taken for support of the removal of the rural areas exemption, which appeared to me to be the


cause of the anomaly of which he was complaining.
We are always ready to examine new suggestions for this formula. A number have been put up, but none of them has so far seemed to us likely on balance to diminish the number of anomalies.

Mr. Hayman: Is the right hon. Gentleman prepared to accept a proposal which will mean a reduction in the revenue from this tax?

Mr. Brooke: Of course, any additional exemption will mean a reduction of the revenue. [HON. MEMBERS: "No."] Any exemption of additional cinemas will mean a reduction of the revenue. I am speaking at the moment of the rural areas exemptions. I am speaking exclusively of that.
My hon. Friend the Member for Honiton has alleged that the new formula embodied in his new Clause would work more fairly than the present one. I felt it must have emanated from somewhere near Exmouth, because it would operate just to bring Exmouth within the exemption. The whole purpose of this rural areas exemption is to bring special assistance to small places which otherwise might lose their means of local entertainment, through their population not being sufficient to keep a cinema in existence.

Mr. Mathew: The suggestion that this anomaly exists only in my constituency as between Exmouth and Sidmouth is not quite accurate. Indeed, since I tabled the new Clause, I have had letters from all over the country. Having seen their books and accounts, I know that a number of cinemas in the West Country suffer from the anomaly. I do not think it is quite as localised as my right hon. Friend would suggest.

Mr. Brooke: There are various grounds on which it can be argued that the anomaly is wrong, but the purpose of the exemption is, as I said, to do something for the relatively small places with no large population which might otherwise have difficulty in keeping a cinema in existence.
I have analysed my hon. Friend's proposal to see whether his new formula, which is based on multiplication by four, would lessen the anomalies. The test, as the Committee will remember, is whether it will satisfactorily define the rural areas

which we want to help. My hon. Friend's new Clause would have the consequence of including as rural areas needing special assistance because of sparsity of population Esher in Surrey, Solihull in Warwickshire, Keighley in Yorkshire and Merthyr in Glamorgan, none of which, keen as we may be to help the hon. Members who represent those places, would naturally occur to any of us as a rural area which would have difficulty in securing for itself any local entertainment.
I quote those instances simply by way of illustration of the extreme difficulty we have in finding any way of improving the existing formula which would not create more anomalies than it would remove.

Mr. Glenvil Hall: As, I think, the right hon. Gentleman will recollect, I happened to occupy the position he now occupies at the time the legislation to which he is referring was put through. There was then a good deal of criticism of the formula, and the late Sir Stafford Cripps indicated that the Treasury would watch it. That was eight years ago, and much has happened since. It is quite obvious that in the intervening period small cinemas have got into deeper and deeper water and are having increasing difficulty in surviving. Would it not be possible for the Chancellor, between now and Report, to see whether some compromise could be drafted and put into the Bill, a compromise between the new Clause in the name of the hon. Member for Honiton (Mr. Mathew) and what the Financial Secretary is now saying?

Mr. Brooke: I would ask the Committee to maintain this distinction in its mind. There is a distinction, as the right hon. Gentleman, I know, realises, between the general problem of the small cinemas and the local problem of the small cinemas in rural areas, and it is that and that only to which the formula applies, and it is to that point alone I have been addressing my recent remarks.
In my speech in the Budget debate, on 19th April, I said that we had set on foot a thorough-going review of all sections of the Entertainments Duty. In order to prove that was not a mere window-dressing argument, I thought of bringing along to the Committee visible proof of the outcome of this review up to date, but because of its comprehensiveness, which would double or treble


the thickness of the wad of paper which the Financial Secretary has to carry about with him during the time of the Committee on the Finance Bill, I resisted the temptation to do that. However this review has been set on foot.
My right hon. Friend has very carefully considered the case put to him by the All-Industry Tax Committee of the Film Industry, and all the other information which is available to him. He has reached the conclusion that this year, when he has had to introduce a firm—and some would say, severe—Budget to prove our national determination to surmount the difficulties of the time, it would be quite out of keeping to announce reductions of any kind this year in the Entertainments Duty. However, anyone who read between the lines of my speech in the Budget debate must have deduced from that, and deduced rightly, that my right hon. Friend is not permanently content with all the existing rates and arrangements of the Entertainments Duty as they stand. He considers that they are going to require further attention.
This is not the time when he can make any move, but between now and the time when he feels that it would be right for him to bring forward proposals, he intends to study very carefully all that has been said today and all that happens in the cinema industry during the coming period, with these price changes and so forth, in order that, at what he considers the appropriate and proper moment, he can bring forward proposals to the Committee.

8.0 p.m.

Mr. A. G. Bottomley: In rising now, I want to make it clear to those hon. Members who have waited patiently for so long for the opportunity to speak that I do not intend that they should be shut out. I imagine that they will have a great deal more to say after having heard the Financial Secretary's speech. It was very disappointing. [HoN. MEMBERS: "Hear, hear."] The whole Committee seems to share that view, but I am always an optimist and I tried to find one bright spark within the right hon. Gentleman's speech.
I thought there was that spark when he did not seem to share the Chancellor's doctrine. The Chancellor said earlier that it was necessary to have only the

Minister in charge of the Bill on the Front Bench, but the Financial Secretary, when we discussed films, earlier in the year, said that he recognised that it was right that he, as one of the responsible Ministers, should be present. Today he was supported by the Parliamentary Secretary to the Board of Trade, and I am very glad that both Ministers dissent from the Chancellor's doctrine.
My hon. Friend the Member for Flint, East (Mrs. White) moved the Second Reading of the new Clause with her usual charm and skill. As the Committee knows, she has great knowledge of the subject and she was able to deploy that knowledge in her argument, though obviously to no avail. She was supported by my hon. Friend the Member for Govan (Mr. Rankin), who initiated the debate on the film industry which was held earlier in the year. I was delighted to find the hon. Member for Honiton (Mr. Mathew) and myself in agreement for a change. We found ourselves in violent disagreement on two occasions when we fought for the honour of representing a constituency in the House of Commons.
I want to follow the Financial Secretary in examining the general position rather than in going too carefully into the Clauses. The right hon. Gentleman did not try to make play with the fact that the Clauses as drawn would be difficult to operate. He understood that the Clauses had to be put in that form in order to keep them within the terms of the Money Resolution. But what we desire by having the Clauses on the Notice Paper is to stress the urgent needs of the film industry and to do that immediately.
I am a rare visitor to the cinema and, therefore, I can perhaps speak more easily from the point of view of justice and equity. I am sure that everybody in the Committee would accept at once that films provide a universal and popular form of relaxation and that going to the cinema widens our experience. There are opportunities of seeing things which it would not be possible to see if we did not have this pictorial presentation. The cinema is also a very powerful medium for influencing the human mind, particularly the minds of the young. I went to a friend's house the other day when a story about the Cisco Kid was being shown on television. It took me back to


my childhood days when I used to get extremely excited about such things and it made me realise what a powerful influence television can be on the young.
The British film industry at its best has a more uplifting character than any other. It typifies the best in the British way of life and, therefore, on the production side, we should do everything possible to see that it flourishes. British films are very much in the position of other industries which over the years have been neglected and have had to rebuild and reequip. But the British film industry has not had that opportunity. It has been very much in the same position as some of the nationalised industries, which were soaked of their resources and were then left to the country to re-equip and rebuild at a time when we could least afford it. In the same way, the film industry was starved by private enterprise in the past and has now not been given the opportunity to do the work which it is best fitted to do.
The impact of films on the public mind is probably as great as that of newspapers. Nobody would suggest for one moment that we should allow newspapers to come into the country from the United States freely to replace our own, but that could happen quite easily if there were the competition among newspapers that there is in the film industry. Because they receive support from the Government as the second major industry in the country, the American film companies are able to enter all kinds of markets, particularly the British market, and keep out British enterprise, which, if given the opportunity to develop, is of the best. The Chancellor is preventing British films having that opportunity.
The present Government, by their neglect and failure to help British film production, are further aggravating the position. There seems to be on the part of the Chancellor no sense of urgency about the need to continue the British Film Production Fund. That lack of decision leads to the postponement of projects by film companies who want to plan production programmes ahead. I had hoped that the Financial Secretary would have told us something about the fund. I hope that it is not too late even now for the right hon. Gentleman to refresh his memory and to consider whether

it is not possible to make a further comment on that matter.
There is also the lack of decision on whether the National Film Finance Corporation is to continue or not. That is causing great distress to the industry, which is in a much more serious situation today, in spite of the optimism of the Financial Secretary, than it was when it was necessary for Parliament to interest itself in films in 1927 and we had the Cinematograph Films Act.
In view of the fact that we are shortly to have a Commonwealth Conference, it is perhaps worth remembering that a year before that Act came into being there was an Imperial Conference, at which the following declaration was made:
 The Imperial Conference, recognising that it is of the greatest importance that a large and increasing proportion of the films exhibited throughout the Empire should be of Empire production, commends the matter and the remedial measures proposed to the consideration of the Governments of the various parts of the Empire with a view to such early and effective action to deal with the serious situation now existing as they may severally find possible.
Not only does our own industry need support. The Indian film industry is developing at a rapid rate.
It is not only important from the point of view of earning currencies for the sterling area that the Commonwealth film industries should have maximum support, but it is important in the struggle between different ideologies. Films are one of the means by which we in the British Commonwealth can perpetuate our democratic way of life. I hope therefore, that the Chancellor will see to it that the whole question of film production is considered by the Government and that the Government in turn will see to it that that is considered by the forthcoming Commonwealth Conference.
I find from HANSARD that the arguments which were used to support the Cinematograph Films Act, in 1927, were to repress foreign domination of our cinema trade and to do away with trade abuses, to alleviate unemployment by creating a new industry—and that is becoming more necessary now with a Conservative Government in office—to publicise Britain, its manufactured goodsc and methods by pictorial means, and to make use of the cinema for a British


rather than a foreign education standpoint. These things are just as necessary today, and they underline the need for supporting the production side of the film industry. Indeed, the Government ought to be giving a much bolder lead to it than to some other industries at this time, because it can help us to overcome our political, social and economic difficulties.
Whatever the Financial Secretary may say about this tax not meaning the difference between life and death, at least it means the difference between health and sickness. The right hon. Gentleman should have been more forthcoming than he has been today about possible tax reliefs. Is he aware that the Cinematograph Exhibitors' Association, as a result of its losses, has already made it known that it may not be able to support the extension of the Production Fund, which is to end in October, 1957? So the question of production is linked closely with the support given to the cinemas.
Reference has been made by hon. Members on both sides of the Committee to the special need of the small cinemas. I want to stress the necessity for doing something to prevent the smaller cinemas from closing. For the Financial Secretary to dismiss this as of little importance shows that the right hon. Gentleman has not been in consultation with some of his right hon. Friends in the Government, because I have here a copy of a letter sent to the Minister of Labour showing that in May this year cinemas were closing in many parts of the country.
The letter lists the Princes Cinema, in Horwich, the Rex, in Bridgwater, the Palace, in Ammanford, the Gaiety, in Southampton, the Empire, in Rawdon, the Cameo, in Warrington, the Star, in Warrington, the Boulevard, in Nottingham, which has been mentioned this afternoon, the Tivoli, in Tiverton, the Black Cat, in Parkhead, the Grand, in Burnley, the Cinema, in Heaton Park, the Royal, in Chorley, the St. Georges, in Falmouth, and the Electraceum, in Oldham. In other words, information has been provided to a member of Her Majesty's Government, and I should have thought that this information would have been passed on, and that it would not have been kept in watertight compartments.
I know also, as a result of correspondence, that small cinemas are having great difficulty in keeping open. My right hon. Friend the Member for Huyton (Mr. Wilson) has given me a letter which he had received from a captain of the Royal Marines. I expressed special interest because for 200 years the headquarters of the Royal Marines was in my constituency. After the war this captain put his life's savings into a small cinema. In his letter he said that he is being hounded out of business by excessive taxation, that he is £1,000 "in the red," that he is having to sell his house and that he has to start life anew. He said that at the moment he is paying £40 a week in tax and is losing £35 a week on the cinema. He is going to sell the cinema to industry because he cannot afford to continue losing money. He added that it is the only cinema for miles around, so because of taxation people in that country district are being prevented from visiting the cinema and taking a small part in social activity.
This gentleman said in his letter that he had raised the matter with an hon. Member who is now a Government Whip, who passed it on to an hon. Gentleman opposite who is Chairman of the Conservative Films Sub-Committee. The writer added that although he was politically inclined that way, he was beginning to find that the Conservative Party had little or no interest in the small businessman.

Mr. Ede: His eyes are being opened, too.

Mr. Bottomley: As my right hon. Friend says, his eyes are being opened, too.
We all agree that the cinema is an essential part of our social fabric, and, as such, we ought to try to retain it. In some cases, as in the case of that country district, it is the only entertainment readily available to members of the public who can share it with their families.
8.15 p.m.
There was a time when, because of the flourishing condition of the industry, profits were high, Entertainments Duty was introduced. But there are not the same flourishing conditions today, and although the hon. Gentleman the Member for Cheadle (Mr. Shepherd) said that greater numbers are attending cinemas


than ever before, that merely represents a general share in the increased prosperity of our land as a result of the Welfare State, full employment and better opportunities for everyone. Really, the cinema industry is not as flourishing as it should be, and the numbers of filmgoers are beginning to fall. This is revealed by the downward trend in attendances since 1946, when they amounted to 1,635 million. In 1954, the numbers had fallen to 1,276 million, and in 1955 there was a further deterioration.
The urgency of the need to help the small cinemas is illustrated by the fact that of the 4,500 cinemas in the country, 2,048 has a seating capacity of less than 750. It is among the latter that losses are being made, where the estimate is that net takings are less than £250 a week.
I say to the Chancellor, therefore, that he should try to help the smaller cinema proprietors. I have not yet heard whether the right hon. Gentleman cannot give them consideration in the same way as it is given to charity performances, in respect of which it is possible to get tax relief. Is it not possible to recover tax in the same way where it is clearly shown that a cinema must close if something of that kind is not done? Entertainments Duty is indeed extremely heavy. The amount collected in 1954 was 32.6 of the gross takings at cinemas, or 50 per cent. of the net takings. The total amount of Entertainments Duty collected last year was £35,330,000.
My hon. Friend the Member for Walthamstow, West (Mr. Redhead) spoke as one who has been employed in Customs and Excise and he referred to the exemptions and the concessions and the resulting difficulties. Is it not possible to subject the cinema industry to Income Tax and Profits Tax in the same way as other forms of industry? Why should it be singled out as an industry which has to pay an additional tax? Why is it the only industry that has to do so?
I agree that Entertainments Duty is not supposed to be a tax on profits, but a levy imposed upon the consumer. In fact, that is not so today and the tax is borne by the industry. Cinemas have been compelled to put up their prices. I should have thought this undesirable at a moment when we are trying to prevent inflation and to stop the cost of living

from rising. As my hon. Friends have said, even if the exhibitor puts up the price of a seat from ls. to ls. 6d., he receives only l½d., which is not much help to the small cinema proprietor. This is a hardship not only on him, but also on the entire industry.
A Committee set up under the chairmanship of Lord Moyne, in 1936, reported as follows:
 the film is ߪ undoubtedly a most important factor in the education of all classes of the community, in the spread of national culture and in presenting ideas and customs to the world. Its potentialities, moreover, in shaping the ideas of the very large numbers to whom it appeals are almost unlimited.
I conclude by saying that the British film industry is essential for aesthetic. social, trade and political reasons. I hope that the Financial Secretary has not said the last word, but that what has been put to him by several of my hon. Friends and his own supporters will be further considered. If not, we shall have no alternative but to force a Division.

Sir C. Taylor: The portion of the speech of my right hon. Friend which referred to the smaller cinemas was received with great disappointment in all parts of the Committee. I think that my hon. Friends who listened to it were extremely bitter in the disappointment which they felt. All of us have small cinemas in our constituencies, and have examined figures audited by qualified accountants, and know that a great many small cinemas have already gone bankrupt and a great number of others will do so in the future unless something is done to help them.
My right hon. Friend said that the Treasury had examined a great many suggested schemes for helping the smaller cinemas. All hon. Members can do is to put forward reasonable suggestions if they are convinced of the justice of the case. It is not the duty of hon. Members, and never has been, to find a perfect Amendment which may meet the case. I submit that, if we are able to convince the Government about the injustice meted out to the smaller cinemas, it is the duty of the Treasury to draft a suitable Amendment to meet the case.
Some of us feel extremely strongly about the subject, and I would urge my right hon. Friend to look into the matter again before the Report stage and to give


us an assurance that he will further consider the subject in order to avoid more bankruptcies in the industry.

Mr. Joseph Slater: Listening to the Financial Secretary's speech, I was reminded of a man who used to belong to our local cricket team. If we wanted to keep the match going, we put him in, and he would stonewall for hours. The Financial Secretary seems to have the same attitude towards the appeal which has been made on behalf of the small cinemas.
I come from Durham County where, in common with other parts, we have the problem of small cinemas being forced to close through lack of support. The Chancellor of the Exchequer is no stranger to that county, for at one time he represented one of its non-county boroughs, and he will appreciate that the rural areas there have the same problem as is found elsewhere. I represent the second largest rural constituency in the county, and I am well aware of the difficulties faced there. A friend of mine went into the cinema business, but, because of lack of support from people in the area, he has had to close down.
One of the reasons given for lack of support for cinemas in rural areas is the advent of television. I believe that, if it were not for the sale of ice cream and sweets, other small cinemas would have to close. In my county there are small cinemas which are not making anything like the figure of £150 per week which has been mentioned.
I have come to the conclusion that the tenor of the right hon. Gentleman's speech was, "raise your prices if you want to keep your cinemas open". The cinema proprietors know that immediately they raise their prices they will lose support. Even if they do raise their prices, the monetary benefit that they receive is negligible, because the greater part of the increase goes to the Treasury. In view of the difficulties which the small cinema proprietors have to face, the right hon. Gentleman ought to have a second look at the matter.
I have received a communication from the Majestic Cinema, Ferry Hill, a cinema run by trustees, and kept open ever since I was a youngster, from the silent film days. The trustees say that, in view of the present reduced patronage due to the

advent of T.V. and other attractions, coupled with the increased cost of maintenance, they are finding it very difficult to carry on. This is a cinema which it is not sought to run at a profit; it is merely desired that it shall pay its way and exist to maintain local social amenities.
I hope that the right hon. Gentleman will have further thoughts about the small cinema.

Mr. Hayman: At the risk of being unpopular, 1 feel that I must take part in the debate because it very seriously affects a county like Cornwall, where I represent an important constituency.

Mr. Ellis Smith: It also affects Knutsford.

Mr. Hayman: Yes, it affects Knutsford. Recent speeches show that other parts of the country are also affected.
The importance of the small cinema in the countryside is that it represents a vital amenity for the people who live and work there. The depopulation of the countryside is going on apace today, and it reminds us very much of what happened in the inter-war years. The cinema in the small urban town or large village which is unable to benefit from existing concessions deserves special consideration. In a county like Cornwall, where we have a big holiday population—we do not always get sunny weather—it is essential that there should be some small places of entertainment to which people can resort in wet weather.
A small cinema proprietor in Cornwall tells me that, after he has met basic expenses in respect of film hire, rent, rates, electricity, advertising, carriage of films, wages, etc., there is nothing left for depreciation of machines and seats. I will not disclose where the cinema is because I have no authority to do so, but it is obviously typical of many cinemas. I would point out that that catalogue of expenses does not include renovation and repair of the building.
Much has been said of the competition of television, and so on, but there are many thousands of people still in the countryside who cannot afford television, and cannot afford the high expense of travelling to a town 10 miles away. These small cinemas are strategically


placed, one might say, throughout the countryside to serve the rural population.
In this particular cinema, the takings average £100 a week, and no less than one-third of that sum goes in Entertainments Duty to the Chancellor of the Exchequer. The Financial Secretary told us a little while ago that the mind of the Chancellor even now is not closed to some proposal, and he admitted to me that that might even mean a diminution in the revenue from this duty. I would suggest to him that this duty is bleeding to death this industry, or at least the small cinemas, and I hope that he will have further thoughts on this matter and bring in a proposal which will help them immediately.

8.30 p.m.

Sir Thomas O'Brien: I will not detain the Committee more than a few minutes. First of all. the small exhibitors of Britain, whatever the outcome of this debate and whatever the final decision of the Government may be, will be very grateful for the warm sympathy which hon. Members on both sides of the Committee have given to their case.
I should like to make two points. I would support the suggestion made by the hon. Member for Eastbourne (Sir C. Taylor) that, the Chancellor having heard the debate and the proposals and observations that have been made, the Treasury or the Government should prepare an Amendment for the Report stage having regard to the information now in possession of the Treasury. The Treasury has all the facts already, and from the discussions that have taken place today adequate information can be provided. Therefore, I think it is incumbent upon the Chancellor himself to produce the suggested Amendment or new Clause that will meet this case.
It may interest the Committee to know that, in regard to the trade union which 1 represent, which caters for the technicians and other general staffs of the cinemas, we ourselves have been obliged in our trade union agreements with the Cinematograph Exhibitors' Association, representing both the small exhibitors and other exhibitors, to have what we call a financial hardship clause. I mention this in order to indicate that we as a trade

union are convinced of the seriousness of the case of the small exhibitors.
We have willingly agreed that an exhibitor who is aggrieved financially and finds himself in a position in which he is not able to pay the trade union minimum rates of pay can appeal through acceptable chartered accountants to be released of the obligation of paying minimum rates of pay. I do not know of any other trade union in the country which has such a clause. However, I will leave that with the Chancellor, and assure him that we as a union and I myself are convinced that there are difficulties among these small exhibitors, even to the extent that a trade union leader such as myself has to agree to a remuneration below the ordinary standard of trade union conditions.
The last point about the Entertainments Duty is that it is no longer morally justified, but I will reserve my major comments on the other Clauses on the Order Paper and will probably speak again. On the subject of television, radio and so on, the Chancellor must take note of the fact that this new source and these new methods of entertainment, popular as they are, and they are becoming increasingly popular, have to be considered against what is left on the fringes of orthodox entertainment and which continues to pay the Entertainments Duty. We must look at that fact, and the Chancellor must also look at it.
If these new forms become so popular, such as television, both B.B.C. and commercial, and the radio, which are not affected by the Entertainments Duty, the people who are struggling with the orthodox forms of entertainment will really have to be helped, and I would ask him to consider whether on Report stage he will not put forward an Amendment to deal with this particular case.

Mr. Dudley Williams: I am very glad to have the opportunity of following the hon. Member for Nottingham, West (Sir T. O'Brien). I thought he made a most important point when he suggested that the trade union of which he is the head had to have a special arrangement with certain of these small exhibitors.
While on that point, I found it rather difficult to follow the argument of my right hon. Friend the Financial Secretary to the Treasury, who, I am sorry to say,


is not here at the moment, when he said that the case was not made out for hardship amongst the smaller cinema exhibitors. I felt that the case was fairly well made out by what was said by hon. and right hon. Gentlemen on both sides of the Committee, but also, in particular, the remarks made by the hon. Member for Northfield (Mr. Chapman), who is no longer in his place. The hon. Gentleman said that about 75 per cent. of the cinemas with a capacity of 1,000 and under were losing money, and I am quite certain that that figure is correct.
I have a particular case in my own constituency, which is a rather unusual case. It is that of a theatre which, in order to be able to maintain its productions of live plays, has to show films for the greater part of the year, and that theatre is losing a very considerable sum of money. I have made a note of the losses which amounted to about £1,800 in the last year, while £10,900 was paid in respect of Entertainments Duty. It is most unfortunate that a theatre of that nature, which is a very important part of the social life of my constituency and which is struggling to keep alive by the showing of films, is now to be put out of business because of the burden of the Entertainments Duty.
I should like my right hon. Friend to pay attention to the plea made by the hon. Member for Nottingham, West and other hon. Members that he should have another look at the matter before Report. It would be a great tragedy if small cinemas were put out of business. They are owned and run by people who are financially extremely courageous. They have had very tough times and are very sore that they are to be knocked out while the large chains will be allowed to continue.

Mr. Glenvil Hall: I do not intend to detain the Committee for more than a minute or two, and I should not have intervened had the Financial Secretary concluded his speech as I had hoped, namely, with some concession to the very strong representations which have been made from all quarters of the Committee. There is one point which may not, I think have yet been made and which I should anyway like to underline. Much has already been said about the losses and difficulties which are now falling increas-

ingly on the owners of small cinemas, and I shall not labour that issue.
I should like to put another point which may carry weight. We all know that the United States film industry can recoup itself within its own borders. It is extremely difficult for the British film industry to do that, owing to the fact that the number of cinemas here does not allow more than a very small margin on what can be described as popular films. Many cinemas, small ones in particular, are closing down in increasing numbers. That means that presently fewer and fewer British films will have a shop window where they can be shown in this country. Which in turn will mean that the British film producers will eventually have to go out of business. That would be a great loss not only to this country but to the world. I shudder to think of a world in which the films which most of us will see will be from Hollywood. We send abroad many films which are ambassadors for our way of life and for the British sense of tolerance. It would be a tragedy if fewer and fewer British films were made because they were unable to find screening in this country.
I hope that the right hon. Gentleman will not look upon this debate as a mere nuisance to himself and to the Treasury. In every quarter of the Committee hon. Members are very disturbed at the situation which now exists and the worse situation which we know will exist next year, unless something is done. I therefore hope that the right hon. Gentleman, even now, will be willing to retrace his steps and have another look at this Clause to see whether something cannot be done to meet the wishes which have been so forcefully expressed.

Major Sir Frank Markham: I will not detain the Committee for more than a few minutes in putting my point of view on an issue upon which opinions have been expressed with force and great fairness; but it is a mistake to suggest that all the losses carried by cinemas in this country can be blamed on the present system of taxation.
The fact is that the cinema industry is a diminishing industry. It is a declining industry. These losses which have been shown so emphatically by hon. Members —and I can parallel them in cinemas in my own constituency—are not so much


because of the incidence of the tax but because people are staying away from cinemas because of the added and improving attraction of television; and it is television which will improve much faster than the cinema.
No doubt, in a very short time we shall be having not only colour television, but colour television on much larger screens. These things are coming, and with them there will be more T.V. fans and fewer cinema fans. Therefore, we shall have, first, the appeal this year to exempt from tax the small cinema in rural areas. Next year or the year after, the cry will be for small cinemas in all areas, and the year after that it will be for cinemas everywhere. Then there will be a sustained cry throughout the country to subsidise cinemas to keep them going, not only as educational institutions, but also as places where young couples can do their courting. Let us recognise the economic facts behind all this.
There is one other point. In one's lifetime one has noticed the deterioration of the cinema programmes. There is not one of us in maturity who can but regret the exceptionally high percentage of American gangster films of brutality and thuggery which are dished out nowadays to young people. I would far rather that that influence on our young people became less than continue as it is today, and I should be a much keener advocate of cinema tax reduction if the programmes were less sadistic.
Yet, in spite of my two major arguments, first that the industry is declining anyway and, secondly, that it is often a bad influence on young people, I hope that my right hon. Friend the Chancellor will consider the representations which have been put up to him from all sides of the Committee for lowering taxation on cinemas in rural areas. There is something worth saving in this cinema industry. Even at its worst, it brings knowledge of the ways in which other peoples live; it brings great classics within the vision of all; and at its best it is one of the finest forms of education and amusement ever devised. It would be a bad thing for the country if cinemas went entirely from our rural areas, and I hope that on Report stage my right hon. Friend will be able to meet the point for ameliorating the difficulties of small cinemas in country districts.

Mr. Charles A. Howell: I hope that the hon. and gallant Member for Buckingham (Sir F. Markham) will forgive me if I do not follow his line of argument. It is not on all fours with the arguments which have been adduced today by other hon. Members on his side of the Committee.
One of my hon. Friends referred earlier to the generous heart of the Chancellor of the Exchequer and there was some rather caustic comment at the time. I wonder what he is thinking now about the generous heart of the Chancellor. I have some sympathy with the Financial Secretary in the task that was imposed upon him. He appeared to me to feel rather guilty in giving out the edict of his right hon. Friend the Chancellor.
While the right hon. Gentleman congratulated both sides of the Committee on keeping the debate free from party points, I make no apology for raising one now. It is not long since the Conservative Party was competing with the cinemas for space on hoardings. When walking along the road and seeing advertisements for "Seven Brides for Seven Brothers" and various other colossal films, one saw big placards pointing out that "Conservatism works". I remind hon. Members opposite who are now surprised at what is happening to the small cinemas that that is how Conservatism works. It looks after the interest of big business.
Walking around Leicester Square[Laughter]—not the way in which the minds of my hon. Friends are working. I hope they will follow my line of argument more closely than some of them seem to be doing. If one walks round Leicester Square one sees nothing but lots of colossal cinemas. [Laughter.] I must remind my hon. Friends that it is the hon. Gentleman who usually sits on the Front Bench opposite below the Gangway who refers to the shocking incidents in Leicester Square. I am thinking more on the aesthetic side of what one sees in the big signs—the bright lights, not the gaudy lights.
When one walks around there, one cannot help being struck by the colossal cinemas which one sees. There is no suggestion that any of those are going bankrupt. I do not know that the other people who seem to be amusing my hon. Friends are going bankrupt, either.

8.45 p.m.

Lieut.-Colonel Marcus Lipton: They do not pay tax.

Mr. Howell: It is perhaps not entertainment.

Mr. Ellis Smith: It does not pay.

Mr. Howell: What I am trying to convey to the Committee is that it would appear that the Chancellor of the Exchequer is Leicester Square-minded. These big cinemas can flourish, but the little cinemas can go to the wall. It seems to me that that is typical of Conservatism and its concern for big business. I am surprised that hon. Members opposite expect anything different. We shall see later, in the Division, whether some of the support which has been given to the new Clause by hon. Members opposite is as sincere when it comes to voting.
The Financial Secretary indicated—I would put it no higher than that—that the Chancellor is fully aware of the position of the small cinemas, but he went on to say that this is not the proper time to do anything about them, owing to the financial position of the country. Surely to goodness we are on a plateau of success. It is not so long ago that we were asked to "Invest in success." Is this success, or have we now come down to the truth that the success is only a myth, because if that is so then none can expect an amelioration of the tax. There can be no tax relief for small cinemas or anyone if the country cannot afford it.
Quite frankly, as I see it the Chancellor wants some money. He wants a global amount of money out of the entertainment industry. I would say to him that if he and his Financial Secretary cannot find a solution, we can at least ask him to refer to the Economic Secretary, who is now sitting with him on the Front Bench. He at least has brought into the House of Commons a new phrase, which is known in other spheres as Boyle's Law, and I do not think that it should be impossible for him to find a Boyle's formula for Entertainments Duty. I suggest to him that he accept the point of view put so cogently from both sides of the Committee that, if it is necessary to get a global amount of money from entertainment, then let us have an equitable formula which will find out where the money is, without putting other people out of industry.
When the Financial Secretary concluded his speech by saying," We may be able to come along later "—apparently when the country is more wealthy—he might have finished up by saying to the cinemas, "Later, Alligator."

Lieut.-Colonel Lipton: I am not going to follow my hon. Friend the Member for Perry Barr (Mr. C. Howell) around Leicester Square. The point that I want to make very briefly is this. Reference has been made to the plight of the cinemas in rural areas, in country and in provincial towns, but the point which I want to make is that the cinemas in London are also in a very difficult position. Unfortunately, the Financial Secretary does not seem to estimate the seriousness of the position in its proper magnitude. Even in London the cinema is going down.
I will mention the case of one cinema in Brixton. That cinema cannot be regarded as a very small one because it has seating capacity for 998 persons. I do not know from where the Financial Secretary got his figures showing that attendances are not very much down, because in this cinema on Brixton Hill the attendance went down from 350,000 in 1954 to 270,000 in 1955. In the same two years, the takings went down from £20,000 to £16,000.
The only point I wish to make is that this process cannot go on very much longer. The time has certainly arrived when, not only from the point of view of the small cinemas in rural areas, but even from that of the larger cinemas in inner London of the kind I have mentioned, action will have to be taken if we want to avoid the complete disappearance of the cinema from our social life.

Mr. H. Macmillan: I think it would be proper for the Committee now to reach a decision on this subject, which we have debated for some time. My right hon. Friend the Financial Secretary has made a very comprehensive statement on behalf of the Government, but I feel that it would be courteous of me just to add to it for a few minutes.
We have had an extremely interesting debate covering a very wide field, into some of the peregrinations of which I would not at my age venture. The debate has covered some really interesting points, both on the production side of the film


industry—which were raised by the right hon. Member for Rochester and Chatham (Mr. Bottomley) and by the right hon. Member for Colne Valley (Mr. Glenvil Hall), in particular—and on the question of the cinema industry as a whole, with particular emphasis, perhaps, on the Clause relating to the small cinema.
I must be quite frank with the Committee and ask for its help and its sympathy. At the beginning of every Finance Bill—the new Clauses stage—a very large number of proposals are put upon the Order Paper. I saw the almost envious and admiring look of the right hon. Member for Colne Valley when his successor was speaking, because the right hon. Gentleman knows as well as I do that Treasury Ministers have to take a view of the whole position and very often have to resist a large number of proposals which in themselves have a great deal to recommend them.
After this Clause we are coming to another and then to more. All of these proposals are meritorious and, in many respects, commend our sympathy to make this or that concession here and there, but if we were to meet them all I am afraid that there would be very little left of the Budget surplus.

Mr. Ellis Smith: Meet one of them.

Mr. Macmillan: Perhaps the hon. Gentleman was not present during the debate on the first new Clause, which we accepted in principle.
Therefore, I ask the Committee to look at the position as a whole. I thought that one of the many interesting speeches made in the debate was made by the hon. Member for Nottingham, West (Sir T. O'Brien), who speaks with great knowledge of the trade union side of this industry. He speaks with perfect truth when he says that, in the present situation, the whole problem of the Entertainments Duty would have to be reconsidered in the light of new developments. That is true.
All sorts of changes are taking place, and it is quite right that the matter should be considered as a whole. On the other hand, this duty brings in a very large sum of money—over £30 million. I am very reluctant to start to touch the fabric of it in this year's Finance Bill. This year I had, as my first experience of a Finance

Bill, to introduce a Budget which maintained a very large surplus. I also thought it right—unpopular but right—to add to that surplus in two directions, by indirect taxation of a considerable amount and by an almost equal amount of direct taxation. What were the arguments which made me feel that that was right? They were that the surplus in the present conditions, this year, should be fortified rather than dissipated.
The Financial Secretary has said that we will look at the whole structure of Entertainments Duty. Many changes may have to take place. I must ask the Committee on this occasion and in this Bill, however, to support the broad view which I am forced to take on this as on many other desirable proposals and to stand firm upon the main purpose which we have set ourselves, which is to maintain and strengthen the surplus and not to begin to fritter it away.
I know how strongly hon. Members feel about different aspects. Perhaps it would be fair to say that important as are the points of view of production and of the large-scale industry, perhaps the sympathy fell largely on the smaller cinemas, but I would remind the Committee that when this tax concession was made, it was based not upon the small cinemas but upon accessibility for the population. It was related to the character of the population. We are therefore getting rather confused if we talk about the small cinema as such in relation to the structure of the tax as laid down by Sir Stafford Cripps, because the concession was made, I think rightly, bearing in mind the character of the area.
Let us be frank, even there we find that a number of anomalies have taken place. Wherever we make a concession of this kind and wherever we draw the line, there is always something just the other side of the line.
I will look very carefully at all the arguments which have been put before us in order to examine the position, but it would be misleading the Committee for me to say that I can entertain any hope of making a change on Report. I must ask the Committee to support me in maintaining the structure of the tax in the broad considerations of the present financial situation—considerations which will have to apply to many other deserving or appealing cases. Having


given the assurance that 1 fully recognise the problems set in modern conditions by the whole structure of the tax, I hope the Committee will support us in resisting these changes.

Question put, That the Clause be read a Second time:—

The Committee divided: Ayes 210, Noes 253.

Division No. 224.]
AYES
[8.59 p.m.


Ainsley, J. W. 
Hall, Rt. Hn. Glenvil (Colne Valley) 
Padley, W. E. 


Albu, A. H.
Hamilton, W. W. 
Paget, R. T.


Allaun, Frank (Salford, E.)
Hannan, W.
Paling, Rt. Hon. W. (Dearne Valley) 


Allen, Arthur (Bosworth)
Harrison, J. (Nottingham, N.) 
Paling, Will T. (Dewsbury)


Allen, Scholefield (Crewe)
Hastings, S.
Palmer, A. M. F.


Anderson, Frank 
Hayman, F. H. 
Parker, J.


Awbery, S. S. 
Hobson, C. R. 
Parkin, B. T. 


Bacon, Miss Alice 
Holman, P.
Paton, John 


Balfour, A.
Holmes, Horace 
Peart, T. F.


Bence, C. R. (Dunbartonshire, E.) 
Holt, A. F.
Price, J. T. (Westhoughton)


Benn, Hn. Wedgwood (Bristol, S.E.) 
Howell, Charles (Perry Barr) 
Price, Philips (Gloucestershire, W.) 


Benson, G.
Howell, Denis (All Saints)
Probert, A. R.


Beswick, F.
Hubbard, T. F.
Proctor, W. T. 


Bevan, Rt. Hon. A. (Ebbw Vale) 
Hughes, Cledwyn (Anglesey) 
Pryde, D. J. 


Blackburn, F.
Hughes, Emrys (S. Ayrshire) 
Randall, H. E. 


Blenkinsop, A. 
Hughes, Hector (Aberdeen, N.) 
Rankin, John 


Blyton, W. R. 
Hunter, A. E.
Redhead, E. C. 


Boardman, H.
Isaacs, Rt. Hon. G. A.
Reid, William 


Bottomley, Rt. Hon. A. G.
Jointer, B.
Roberts, Albert (Normanton) 


Bowden, H. W. (Leicester, S.W.) 
Jay, Rt. Hon. D. P. T.
Roberts, Goronwy (Caernarvon) 


Bowen, E. R. (Cardigan)
Jeger, George (Goole)
Robinson, Kenneth (St. Pancras, N.) 


Bowles, F. G.
Jeger, Mrs.Lena(Holbn &amp; St.Pncs,S.) 
Rogers, George (Kensington, N.) 


Braddock, Mrs. Elizabeth
Johnson, James (Rugby)
Ross, William


Brockway, A. F. 
Jones, David (The Hartlepools) 
Royle, C.


Broughton, Dr. A. D. D.
Jones, Elwyn (W. Ham, S.)
Shinwell, Rt. Hon. E.


Brown, Rt. Hon. George (Belper) 
Jones, Jaok (Rotherham)
Short, E. W. 


Brown, Thomas (Ince)
Jones, J. Idwal (Wrexham)
Shurmer, P. L. E.


Burton, Miss F. E.
Jones, T. W. (Merioneth)
Silverman, Julius (Aston) 


Butler, Herbert (Hackney, C.) 
Kenyon,C.
Skeffington, A. M.


Callaghan, L. J. 
Key, Rt. Hon. C. W.
Slater, Mrs. H. (Stoke, N.)


Castle, Mrs. B. A.
King, Dr. H. M. 
Slater, J. (Sedgefield)


Champion, A. J. 
Lawson, G. M.
Smith, Ellis (Stoke, S.)


Chapman, W. D. 
Lee, Frederick (Newton)
Sorensen, R. W. 


Chetwynd, G. R. 
Lee, Miss Jennie (Cannock)
Sparks, J. A. 


Clunie,J
Lever, Leslie (Ardwick)
Steele, T.


Coldrick, W.
Lewis, Arthur 
Stewart, Michael (Fulham)


Collick, P. H. (Birkenhead)
Lindgren, G. S. 
Stones, W. (Consett) 


Collins, V. J.(Shoreditch &amp; Finsbury) 
Lipton, Lt.-Col. M.
Stross,Dr.Barnett(Stoke-on-Trent,C.) 


Cove, W. G.
Logan, D. C.
Summerskill, Rt. Hon. E.


Craddock, George (Bradford, S.) 
Mabon, Dr. J. Dickson
Sylvester, C. O.


Cronin, J. D.
MacColl, J. E. 
Taylor, Bernard (Mansfield)


Grossman, R. H. S.
McGhee, H. G. 
Taylor, John (West Lothian) 


Cullen, Mrs. A.
McGovern, J. 
Thomas, lorwerth (Rhondda, W.) 


Darling, George (Hillsborough) 
McInnes, J.
Thomson, George (Dundee, E.) 


Davies, Ernest (Enfield, E.)
McKay, John (Wallsend)
Thornton, E.


Davies, Stephen (Merthyr)
McLeavy, Frank
Timmons, J. 


Deer, G.
MacPherson, Malcolm (Stirling) 
Tomney, F. 


Delargy, H. J. 
Mahon, Simon
Ungoed-Thomas, Sir Lynn


Dodds, N. N.
Mallalieu, E. L. (Brigg)
Wade, D. W. 


Dugdale, Rt. Hn. John (W. Brmwoh) 
Mann, Mrs. Jean 
Weitzman, D.


Dye, S.
Marquand, Rt. Hon. H. A.
Wells, William (Walsall, N.)


Ede, Rt. Hon. J. C.
Mason, Roy
West, D. G. 


Edwards, Rt. Hon. Ness (Caerphilly) 
Messer, Sir F. 
Wheeldon, W. E.


Edwards, W. J. (Stepney)
Mikardo, Ian
White, Mrs. Eirene (E. Flint) 


Evans, Albert (Islington, S.W.) 
Mitchison, G. R. 
White, Henry (Derbyshire, N.E.) 


Evans, Edward (Lowestoft)
Monslow, W. 
Wilkins, W. A.


Evans, Stanley (Wednesbury) 
Moody, A. S.
Willey, Frederick 


Fernyhough, E. 
Morris, Percy (Swansea, W.) 
Williams, David (Neath)


Fienhurgh, W.
Morrison, Rt.Hn.Herbert(Lewis'm,S.) 
Williams, Rt. Hon. T. (Don Valley) 


Fletcher, Eric 
Mort, D. L.
Williams, W. R. (Openshaw) 


Forman, J. C.
Moss, R.
Williams, W. T. (Barons Court) 


Fraser, Thomas (Hamilton)
Moyle, A.
Willis, Eustace (Edinburgh, E.) 


Gibson, C. W. 
Mulley, F. W.
Wilson, Rt. Hon. Harold (Huyton) 


Gooch, E. G.
Neal, Harold (Bolsever)
Winterbottom, Richard


Gordon Walker, Rt. Hon. P. C. 
Noel-Baker, Rt. Hon. (Derby, S.) 
Woodburn, Rt. Hon. A.


Grenfell, Rt. Hon. D. R.
O'Brien, Sir Thomas
Woof, R. E.


Grey, C. F.
Oliver, G. H. 
Yates, V. (Ladywood)


Griffiths, David (Rother Valley) 
Orbach, M.
Zilliacus, K.


Griffiths, Rt. Hon. James (Llanelly) 
Oswald, T.



Griffiths, William (Exchange) 
Owen, W. J.
TELLERS FOR THE AYES: 


Grimond, J.

Mr. Pearson and Mr. Simmons.


Hale, Leslie






NOES


Agnew, Cmdr. P. G.
Gower, H. R. 
Mawby, R. L.


Aitken, W. T.
Graham, Sir Fergus 
Maydon, Lt.-Comdr. S. L. C. 


Allan, R. A. (Paddington, S.) 
Grant, W. (Woodside)
Monckton, Rt. Hon. Sir Walter 


Alport, C. J. M.
Grant-Ferris, Wg Cdr.R. (Nantwich) 
Morrison, John (Salisbury) 


Amory, Rt. Hn. Heathcoat (Tiverton) 
Green, A.
Mott-Radclyffe, C. E.


Anstruther-Gray, Major Sir William 
Grimston, Hon. John (St. Albans) 
Nabarro, G. D. N.


Arbuthnot, John
Grimston, Sir Robert (Westbury) 
Nairn, D. L. S.


Armstrong, C. W.
Gurden, Harold
Neave, Airey


Ashton, H. 
Hall, John (Wycombe)
Nicholson, Godfrey (Farnham) 


Atkins, H. E. 
Harrison, A. B. C. (Maldon) 
Nicolson, N. (B'n'm'th,E. &amp; Chr'oh) 


Baldwin, A. E. 
Harrison, Col. J. H. (Eye) 
Nield, Basil (Chester)


Balniel, Lord 
Harvey,Air Cdre. A. V. (Macelesfd) 
Nugent, G. R. H.


Barber, Anthony 
Harvey, Ian (Harrow, E.)
Nutting, Rt. Hon. Anthony 


Barlow, Sir John 
Harvey, John (Walthamstow, E.) 
Oakshott, H. D.


Barter, John
Harvie-Watt, Sir George
O'Neill, Hn. Phelim (Co.Antrim, N.) 


Baxter, Sir Beverley
Hay, John
Ormsby-Gore, Hon. W. D.


Bell, Philip (Bolton, E.)
Heald, Rt. Hon. Sir Lionel
Orr, Capt. L. P. S.


Bell, Ronald (Bucks, S.)
Heath, Rt. Hon. E. R. G.
Orr-Ewing, Charles Ian (Hendon, N.) 


Bennett F. M. (Torquay)
Hill, Mrs. E. (Wythenshawe)
Osborne, C.


Bennett, Dr. Reginald
Hill, John (S. Norfolk)
Page, R. G.


Bevins, J. R. (Toxteth)
Hirst, Geoffrey 
Pannell, N. A. (Kirkdale) 


Bidgood, J. C.
Holland-Martin, C. J.
Partridge, E.


Birch, Rt. Hon. Nigel
Hope, Lord John 
Peyton, J. W. W.


Bishop, F. P. 
Hornby, R. P. 
Pickthorn, K. W. M.


Black, C. W. 
Horobin, Sir Ian
Pilkington, Capt. R. A.


Body, R. F. 
Horsbrugh, Rt. Hon. Dame Florence 
Pitt, Miss E. M.


Bossom, Sir Alfred
Howard, Hon. Greville (St. Ives) 
Pott, H. P.


Boyd-Carpenter, Rt. Hon. J. A. 
Howard, John (Test)
Powell, J. Enoch


Boyle, Sir Edward
Hughes Hallet, Vice-Admiral J. 
Price, Henry (Lewisham, W.) 


Braine, B. R.
Hulbert, Sir Norman
Prior-Palmer, Brig. O. L.


Braithwaite, Sir Albert (Harrow, W.) 
Hurd, A. R.
Raikes, Sir Victor


Bromley-Davenport, Lt.-Col. W. H. 
Hutchison, Sir Ian Clark (E'b'gh,W.) 
Ramsden, J. E.


Brooke, Rt. Hon. Henry
Hyde, Montgomery 
Rawlinson, Peter


Browne, J. Nixon (Craigton) 
Hylton-Foster, Sir H. B. H. 
Redmayne, M.


Buchan-Hepburn, Rt. Hon. P. G. T. 
lremonger, T. L.
Remnant, Hon. P.


Bullus, Wing Commander E. E. 
Irvine, Bryant Cadman (Rye) 
Renton, D. L. M.


Burden, F. F. A.
Jenkins, Robert (Dulwich)
Roberts, Sir Peter (Heeley) 


Butcher, Sir Herbert
Jennings, J. C. (Burton)
Robinson, Sir Roland (Blackpool, S.) 


Campbell, Sir David
Jennings, Sir Roland (Hallam) 
Rodgers, John (Sevenoaks)


Carr, Robert 
Johnson, Dr. Donald (Carlisle) 
Roper, Sir Harold


Cary, Sir Robert 
Johnson, Eric (Blaokley)
Russell, R. S.


Channon, H. 
Joseph, Sir Keith
Schofield, Lt.-Col. W.


Chichester-Clark, R.
Joynson-Hicks, lion. Sir Lancelot 
Scott-Miller, Cmdr. R.


Cole, Norman 
Kaberry, D.
Sharpies, R. C.


Cooper-Key, E. M.
Keegan, D.
Shepherd, William


Cordeaux, Lt.-Col. J. K.
Kerby, Capt. H. B. 
Simon, J. E. S. (Middlesbrough, W.) 


Corfield, Capt. F. V.
Kerr, H. W. 
Smithers, Peter (Winchester) 


Craddock, Beresford (Spelthorne) 
Kershaw, J. A. 
Soames, Capt. C.


Crowder, Sir John (Finchley) 
Kirk, P. M.
Spearman, Sir Alexander


Crowder, Petre (Ruislip—Northwood) 
Lagden, G. W. 
Speir, R. M.


Cunningham, Knox
Lambert, Hon. G. 
Spens, Rt. Hn. Sir P. (Kens'gt'n, S.) 


Currie, G. B. H.
Lambton, Viscount 
Stanley, Capt. Hon. Richard 


Dance, J. C. G. 
Leavey, J. A. 
Stevens, Geoffrey


Davidson, Viscountess 
Leburn, W. G. 
Steward, Harold (Stockport, S.) 


D'Avigdor-Goldsmid, 
Legge-Bourke, Maj. E. A. H.
Steward, Sir William (Woolwich, W.) 


Sir Henry Deedes, W. F.
Legh, Hon. Peter (Petersfield) 
Stewart, Henderson (Fife, E.) 


Dodds-Parker, A. D.
Lindsay, Hon. James (Devon, N.) 
Steddart-Scott, Col. M.


Donaldson, Cmdr. C. E. McA. 
Lindsay, Martin (Solihull)
Studholme, Sir Henry


Doughty, C. J. A.
Linstead, Sir H. N.
Summers, Sir Spencer


Drayson, G. B. 
Lloyd, Maj. Sir Guy (Renfrew, E.) 
Taylor, Sir Charles (Eastbourne) 


du Cann, E. D. L.
Longden, Gilbert 
Taylor, William (Bradford, N.) 


Dugdale, Rt. Hen. Sir T. (Richmond) 
Low, Rt. Hon. A. R. W.
Teeling, W.


Duncan, Capt. J. A. L.
Lucas, P. B. (Brentford &amp; Chiswick) 
Thomas, Leslie (Canterbury) 


Eccles, Rt. Hon. Sir David
Lucas-Tooth, Sir Hugh
Thompson, Kenneth (Walton) 


Eden, J. B. (Bournemouth, West) 
McAdden, S. J. 
Thornton-Kemsley, C. N.


Elliot, Rt. Hon. W. E.
Macdonald, Sir Peter
Tiley, A. (Bradford, W.)


Errington, Sir Eric
McKihbin, A. J.
Tilney, John (Wavertree)


Erroll, F. J. 
Mackie, J. H. (Galloway) 
Touche, Sir Gordon


Farey-Jones, F. W.
McLaughlin, Mrs. P.
Turner, H. F. L.


Fell, A.
Maclay, Rt. Hon. John 
Tweedsmuir, Lady


Finlay, Graeme 
Macmillan,Rt. Hn.Harold (Bromley) 
Vane, W. M. F.


Fisher, Nigel 
Macpherson, Niall (Dumfries) 
Vaughan-Morgan, J. K.


Fleetwood-Hesketh, R. F. 
Maddan, Martin
Vickers, Miss J. H.


Fletcher-Cooke, C.
Maitland, Cdr. J. F. W. (Horncastle) 
Vosper, D. F.


Foster, John
Maitland, Hon. Patrick (Lanark) 
Wakefield, Edward (Derbyshire, W.) 


Fraser, Sir Ian (M'cmhe &amp; Lonsdale) 
Manningham-Buller, Rt. Hn. Sir R. 
Wakefield, Sir Wavell (St. M'lebone) 


Freeth, D. K.
Markham, Major Sir Frank 
Walker-Smith, D. C.


Galbraith, Hon. T. G. D. 
Marlowe, A. A. H. 
Wall, Major Patrick


Gammans, Sir David
Marples, A. E.
Ward, Hon. George (Worcester) 


Garner-Evans, E. H.
Marshall, Douglas 
Waterhouse, Capt. Rt. Hon. C. 


Glover, D.
Mathew, R.
Whitelaw, W.S.I.(Penrith &amp; Border)


Godber, J. B.
Maude, Angus



Gomme-Duncan, Col. Sir Alan 




Gough, C. F. H.

Williams, Paul (Sunderland, S.)
Wood, Hon. R.
TELLERS FOR THE NOES:


Williams, R. Dudley (Exeter)
Wooilam, John Victor
Mr. Hughes-Young and


Wills, G. (Bridgwater)
Yates, William (The Wrekln)
Mr. R. Thompson.

New Clause.—(REDUCTION OF ENTERTAINMENTS DUTY ON SMALL WEEKLY TAKINGS AT CINEMATOGRAPH THEATRES.)

(1) Where the Commissioners of Customs and Excise, on an application made in such manner as they may direct, are satisfied that in any week beginning on a Sunday on or after the fifth day of August, nineteen hundred and fifty-six, the total amount of payments for admission received at any one cinematograph theatre (being payments to which this section applies) did not exceed three hundred and fifty pounds. then the entertainments duty chargeable in respect of those payments shall be reduced to such percentage of what that duty would have been, if this section had not been passed, as is shown in the Schedule (Reduction of entertainments duty on small weekly takings at cinematograph theatres) to

this Act, subject to such marginal relief as is shown in that Schedule.

(2) This section applies to payments for admission to entertainments consisting wholly or mainly of the exhibition of a cinematograph film or cinematograph films, being payments in respect of which, if this section had not been passed, duty would have been payable on the scale set out in Part III of First Schedule to the Finance Act, 1954.

(3) In this section the expression "cinematograph theatre" means premises licensed under the provisions of the Cinematograph Act, 1909.—[Mr. Rankin.]

Brought up, and read the First time.

Motion made, and Question put, That the Clause be read a Second time:—

The Committee divided: Ayes 212, Noes 253.

Division No.225.]
AYES
[9.9 p.m.


Ainsley, J. W.
Dye, S.
Lee, Miss Jennie (Cannock)


Albu, A. H.
Ede, Rt. Hon. J. C.
Lever, Leslie (Ardwick)


Allaun, Frank (Salford, E.)
Edwards, Rt. Hon. Ness (Caerphilly)
Lewis, Arthur


Allen, Arthur (Bosworth)
Edwards, W. J. (Stepney)
Lindgren, G. S.


Allen, Soholefield (Crewe)
Evans, Albert (Islington, S.W.)
Logan, D. G.


Anderson, Frank
Evans, Edward (Lowestoft)
Mabon, Dr. J. Dickson


Awbery, S. S.
Evans, Stanley (Wednesbury)
MacColl, J. E.


Bacon, Miss Alice
Fernyhough, E.
McGhee, H. G.


Balfour, A.
Fienburgh, W.
McGovern, J.


Bellenger, Rt. Hon. F. J.
Fletcher, Eric
McInnes, J.


Bence, C. R. (Dunbartonshire, E.)
Forman, J. C.
McKay, John (Wallsend)


Benn, Hn. Wedgwood (Bristol, S.E.)
Fraser, Thomas (Hamilton)
McLeavy, Frank


Benson, G.
Gibson, C. W.
MacPherson, Malcolm (Stirling)


Beswick, F.
Gordon Walker, Rt. Hon. P. C.
Mahon, Simon


Bevan, Rt. Hon. A. (Ebbw Vale)
Grey, C. F
Mallalieu, E. L. (Brigg)


Blackburn, F.
Griffiths, David (Bother Valley)
Mann, Mrs. Jean


Blenkinsop, A.
Griffiths, Rt. Hon. James (Lianelly)
Marquand, Rt. Hon. H. A.


Blyton, W. R.
Griffiths, William (Exchange)
Mason, Roy


Boardman, H.
Grimond, J.
Mayhew, C. P.


Bottomley, Rt. Hon. A. G.
Hale, Leslie
Messer, Sir F.


Bowden, H. W. (Leicester, S.W.)
Hall, Rt. Hn. Glenvil (Colne Valley)
Mikardo, Ian


Bowen, E. R. (Cardigan)
Hamilton, W. W.
Mitchison, G. R.


Bowles, F. G.
Hannan, W.
Monslow, W.


Boyd, T. C.
Harrison, J. (Nottingham, N.)
Moody, A. S.


Braddock, Mrs. Elizabeth
Hastings, S.
Morris, Percy (Swansea, W.)


Brockway, A. F.
Hayman, F. H.
Morrison,Rt.Hn.Herbert(Lewis'm,S.)


Broughton, Dr. A. D. D.
Hobson, C. R.
Mort, D. L.


Brown, Rt. Hon. George (Belper)
Holman, P.
Moss, R.


Brown, Thomas (Ince) Burton, Miss F. E.
Holmes, Horace
Moyle, A.


Butler, Herbert (Hackney, C.)
Holt, A. F.
Mulley, F. W.


Callaghan, L. J.
Howell, Charles (Perry Barr)
Neal, Harold (Bolsover)


Castle, Mrs. B. A.
Howell, Denis (All Saints)
Noel-Baker, Rt. Hon. P. (Derby, S.)


Champion, A. J.
Hubbard, T. F.
O'Brien, Sir Thomas


Chapman, W. D.
Hughes, Cledwyn (Anglesey)
Oliver, G. H.


Chetwynd, G. R.
Hughes, Emrys (S. Ayrshire)
Orbach, M.


Clunie, J.
Hughes, Hector (Aberdeen, N.)
Oswald, T.


Coldrick, W.
Hunter, A. E.
Owen, W. J.


Collick, P. H. (Birkenhead)
Isaacs, Rt. Hon. G. A.
Padley, W. E.


Collins, V.J. (Shoreditch &amp; Finsbury)
Janner, B.
Paget, R. T.


Cove, W G.
Jay, Rt. Hon. D. P. T.
Paling, Rt. Hon. W. (Dearne Valley)


Craddock, George (Bradford, S.)
Jeger, George (Goole)
Paling, Will T. (Dewsbury)


Cronin, J. D.
Jeger,Mrs.Lena(Holbn &amp; St.Pancs,S).
Palmer, A. M. F.


Crossman, R. H. S.
Johnson, James (Rugby)
Pargiter, G. A.


Cullen, Mrs. A.
Jones, David (The Hartlepools)
Parker, J.


Darling, George (Hillsborough)
Jones, Elwyn (W. Ham, 8.)
Parkin, B. T.


Davies, Ernest (Enfield, E.)
Jones, Jack (Rotherham)
Paton, John


Davies, Stephen (Merthyr)
Jones, J. Idwal (Wrexham)
Peart, T. F.


Deer, G.
Jones, T. W. (Merioneth)
Price, J. T. (Westhoughton)


Delargy, H. J.
Kenyon, C.
Price, Philips (Gloucestershire, W.)


Dodds, N. N.
Key, Rt. Hon. C. W.
Probert, A. R.


Dugdale, Rt. Hn. John (W. Brmwch)
King, Dr. H. M.
Proctor, W. T.



Lawson, G. M.
Pryde, D. J.



Lee, Frederick (Newton)
Randall, H. E.

Rankin, John
Steele, T.
Wheeldon, W. E.


Redhead, E. C.
Stewart, Michael (Fulham)
White, Mrs. Eirene (E. Flint)


Reid, William
Stones, W. (Consett)
White, Henry (Derbyshire, N.E.)


Roberts, Albert (Normanton)
Stross,Dr.Barnett(Stoke-on-Trent,C.) 
Wilkins, W. A.


Roberts, Goronwy (Caernarvon)
Summerskill, Rt. Hon. E.
Willey, Frederick


Rogers, George (Kensington, N.)
Sylvester, G. O.
Williams, David (Neath)


Ross, William
Taylor, Bernard (Mansfield)
Williams, Rt. Hon T (Don Valley)


Royle, C.
Taylor, John (West Lothian)
Williams, W. R. (Openshaw)


Shinwell, Rt. Hon. E.
Thomas, lorwerth (Rhondda, W.)
Williams, W. T. (Barons Court)


Short, E. W.
Thomson, George (Dundee, E.)
Willis, Eustace (Edinburgh, E.)


Shurmer, P. L. E.
Thornton, E.
Wilson, Rt. Hon. Harold (Huyton)


Silverman, Julius (Aston)
Timmons, J.
Winterbottom, Richard


Skeffington, A. M.
Tomney, F.
Woodburn, Rt. Hon. A.


Slater, Mrs. H. (Stoke, N.)
Ungoed-Thomas, Sir Lynn
Woof, R. E.


Slater, J. (Sedgefield)
Wade, D. W.
Yates, V. (Ladywood)


Smith, Ellis (Stoke, S.)
Weitzman, D.
Zilliacus, K.


Sorensen, R. W.
Wells, William (Walsall, N.)



Sparks, J. A.
West, D. G.
TELLERS FOR THE AYES:




Mr. Pearson and Mr. Simmons.

Osborne, C.
Scott-Miller, Cmdr. R.
Thompson, Ltd.-Cdr. R. (Croydon, S.)


Page, R. G.
Sharples, R. C.
Thornton-Kemsley, C. N.


Pannell, N. A. (Kirkdale)
Shepherd, William
Tiley, A. (Bradford, W.)


Partridge, E.
Simon, J. E. S. (Middlesbrough, W.)
Tilney, John (Wavertree)


Peyton, J. W. W.
Smithers, Peter (Winchester)
Touche, Sir Gordon


Pickthorn, K. W. M.
Soames, Capt. C.
Turner-Samuels, M.


Pilkington, Capt. R. A.
Spearman, Sir Alexander
Tweedsmuir, Lady


Pitt, Miss E. M.
Speir, R. M.
Vane, W. M. F.


Pott, H. P.
Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)
Vaughan-Morgan, J. K.


Powell, J. Enoch
Stanley, Capt. Hon. Richard
Vickers, Miss J. H.


Price, Henry (Lewisham, W.)
Stevens, Geoffrey
Vosper, D. F.


Prior-Palmer, Brig. O. L.
Steward, Harold (Stockport, S.)
Wakefield, Sir Wavell (St. M'lebone)


Raikes, Sir Victor
Steward, Sir William (Woolwich, W.)
Walker-Smith, D. C.


Ramsden, J. E.
Stewart, Henderson (Fife, E.)
Wall, Major Patrick


Rawlinson, Peter
Stoddart-Scott, Col. M.
Ward, Hon. George (Worcester)


Redmayne, M.
Studholme, Sir Henry
Waterhouse, Capt. Rt. Hon. C.


Renton, D. L. M.
Summers, Sir Spencer
Whitelaw, W.S.I.(Penrith &amp; Border)


Roberts, Sir Peter (Heeley)
Taylor, Sir Charles (Eastbourne)
Williams, Paul (Sunderland, S.)


Robinson, Sir Roland (Blackpool, S.)
Taylor, William (Bradford, N.)
Williams, Rt. Dudley (Exeter)


Rodgers, John (Sevenoaks)
Teeling, W.
Woollam, John Victor


Roper, Sir Harold
Thomas, Leslie (Canterbury)



Russell, R. S.
Thompson, Kenneth (Walton)
TELLERS FOR THE NOES:


Schofield, Lt.-Col. W.

Mr. Wills and Mr. E. Wakefield.

New Clause.—(100 PER CENT.DISABLED.)

The following section shall be added to Part VIII of the Income Tax Act, 1952: —
 228A. If the claimant proves that during the whole of the year of assessment

(a) he has been in receipt of a war disablement pension or an industrial injury pension granted by the Ministry of Pensions and National Insurance and determined by reference to one hundred per cent. disablement, or
(b) though not in receipt of a one hundred per cent. disablement pension or industrial injury pension he nevertheless is disabled in manner and degree equivalent to one hundred per cent. disablement,

he shall be entitled to a deduction from the amount of income tax with which he is chargeable equal to tax at the standard rate on one hundred pounds ".—[Sir F. Messer.]

Brought up, and read the First time.Sir Frederick

Sir Temporary Messer: I beg to move, That the Clause be read a Second time.

The Temporary Chairman (Mr. James H. Hoy): I think it will be convenient also to consider the new Clause, "Blind persons", which is in the name of the right hon. Gentleman the Member for Huyton (Mr. H. Wilson).

Sir F. Messer: This new Clause is, I think, in rather unusual form. However, it represents what I believe to be the repair of a very grave omission in the past. It should be easy, when asking for support for a Clause which would bring benefit to disabled people, to dilate on their very great hardship and to arouse feelings of a sentimental nature. I think, however, that it would be an error if we were to attempt to argue a case when

the inspiration is merely emotional rather than to deal with it in a way that would commend itself as being one not of sentiment but of realism, a case which depended not on pity for the unfortunate but rather on justice.
It is a case in which I at least am not claiming from the Government any generosity but what I believe to be equity, because the new Clause seeks to give relief to people who are 100 per cent. disabled. It is important that the Committee should keep in mind that these people are 100 per cent. disabled, which means that they are on a standard where it is recognised that they are entirely dependent on outside resources. It is not a case, of course, of real poverty, because these people are in the Income Tax class. We are asking in the new Clause that these disabled people should be recognised as being entitled to be placed on an equality with others.
The principle of our Income Tax law is not that we just tax income. We take into account expenses. We take into account what may be said to be the available income, and I shall claim that people who are 100 per cent, physically disabled find that it costs more for them to live than it costs normal people. This does not mean that they are bedridden or that they are completely immobile, but it means that, where the normal person can walk, they must provide some means of transport. They must have a taxicab where other people would be able to use their own natural means of progression. They have to find a mechanical contrivance that they can drive. These are the people who, when they need service, must pay for service of a kind which they could


quite easily render themselves if it were not for the fact that they are disabled.
My argument, therefore, is based upon the reality of the fact that they are already paying more for the privilege of living than does the normal person. One sees so many people who are dependent upon artificial aids, such as caliper splints, surgical boots and spinal jackets. These people are not within the range where they can obtain benefit from National Assistance, if they have an income which brings them within the Income Tax class. They are not persons, therefore, who would be content to have these appliances and wait until they were worn out before renewing them. They would have had to buy the original appliances and spare appliances in case of accidents. They need to use these appliances and, consequently, there is an expense to them individually which is not borne by the normal individual.
For those reasons, I think it is clear that we ought to recognise these things as being an allowance. It is not a case of our being sorry for these people because they suffer, and maybe are suffering. Today there are many types of this disablement. Only recently I was speaking to a highly intelligent man, a spastic. He was just able to walk, about an inch at a time. I met him in the premises of the British Medical Association, where he went to attend a meeting which I was attending.
This man told me how expensive it was when he had to replace the appliances he wore, and how expensive it was for him to have to pay for the services needed in his own home. I do not think it necessary to go into greater detail about the physically handicapped. It is sufficient for my purpose to assert that owing to increased costs these people deserve consideration.
I have no desire to keep the Committee at any length. but now I want to say a word or two about the second proposed new Clause dealing with blind people. Speaking from memory, it is about 20 years ago—a little more or a
little less—that the late Sir Kingsley Wood, then Minister of Health in a Tory Government, brought in the Blind Persons Act. That Measure was a big improvement on the 1902 Act. It showed that the Government of the day realised that

blind people deserved special attention. This was not because they were blind, not because they were bereft of their sight—robbed of the greatest gift that man and the animal kingdom have—but because it costs the blind person more to live than the sighted.
Blind persons need much done for them, especially if they become blind late in life. Children who are born blind, and have the opportunity of training, become adept in many things which the later blinded person is unable to tackle. Therefore, I depend upon the fact that it is recognised that a blind person needs more than the normal person, and that it has been so recognised in the memory of hon. Members of this House. It will be remembered, for instance, that from 1945 onwards we have given blind people under the National Assistance Act a sum of money in excess of that given to ordinary people. At present, the increase in respect of a blind person who needs to draw National Assistance is about 18s. per week.
9.30 p.m.
The Clause refers to the registered blind person. It is the responsibility of county councils or county borough councils to register blind people. In consequence of that registration, the individuals are entitled to be recognised as blind people for the purpose of any Act of Parliament. In this case, it would mean that registered blind persons would be entitled to the advantages of the Clause.
Middle-class blind people who may need to follow some sort of activity are compelled to pay for readers. They have to pay for guides if they want to go more than a short distance away from their homes and known haunts. They are compelled to pay for all the service that they require. Blind people are handicapped just as the physically disabled are.
I do not feel that there is any great need to stress the two Clauses. They have a specially powerful appeal to me. I do not know how the Chancellor can resist something which will not cost the Treasury very much but will bring a little ease to those who not only deserve it but should, in justice, be given it.

Mr. Edward Evans: I rise to support the very moving plea made by my hon. Friend the Member for Tottenham (Sir F. Messer) on behalf of the disabled. I


should have thought there was little need to detain the Committee by talking about the merits of the two Clauses.
I ought to declare a kind of vicarious interest, because my professional life has been spent among disabled people. For many years I have, as it were, incurred an occupational liability by leading deputations from both sides of the House of Commons to those occupying the exalted office of Financial Secretary to the Treasury. We have gone very little beyond obtaining a sympathetic hearing of our plea, an avowal of understanding and a promise later on to look into the merits of the case; but we have had no practical relief. Following the plea made by my hon. Friend, which I am sure is supported by every right hon. and hon. Member who knows the consequential disabilities of the major handicaps from which so many of our citizens suffer, I hope that this time there will be some response from the Treasury..
What we are really seeking by asking the Government for this relief is a recognition of the cost of disability, what I might call the cost of being blind, of being an epileptic, a cripple, a spastic or a polio victim. Those of us who have worked among people of that kind and know the disability intimately know that inevitably there is an additional cost added to the ordinary hazards of life and of maintaining a decent standard of life. My hon. Friend has mentioned that, in those cases which come within the ambit of National Assistance, there is a special recognition.
In the Blind Persons Act, the Government imposed upon local authorities the duty of looking after the blind, and that duty has been continued and is reimposed under the National Assistance Act. Although the welfare Clauses are not made mandatory, there is a provision that these disabled persons can go to the local authority for welfare services. I should like to call the attention of the right hon. Gentleman to this matter, because probably his reply will be that it will be so difficult to administer and to decide who is a 100 per cent. disabled person. I want to suggest to him how that difficulty can be overcome.
In the Blind Persons Act, there is laid down a statutory definition of a blind person, and, as far as I know, that is the only disability that has a statutory definition. Under the Pensions Acts, the

ex-Service man has his certificate of 100 per cent. disability. The blind person is already provided for in that respect. Under the welfare Clauses of the National Assistance Act, it is open to local, authorities to maintain a register of disabled persons, and if their names are on that list, I suggest to the right hon. Gentleman that that should be a sufficient guarantee that those are bona fide cases of 100 per cent. disability. I submit that that is a rather important administrative point, because it will help the right hon. Gentleman to get over the difficulty that he might meet in having applications for this relief from persons who really do not fall into the category of 100 per cent. disablement. They can now be identified.
I am going to quote in aid of this case the Second Report of the Royal Commission on the Taxation of Profits and Income, paragraphs 201 and 202. The Commission's recommendation was that these persons suffering from 100 per cent. disability should be granted what are, in effect, the terms of these two new Clauses; that is to say, a rebate of £100 of their Income Tax liability. My hon. Friend mentioned the extra cost that follows on such a disability. To take the case of a blind lawyer, he has to have a reader and has to buy all the expensive books that are necessary. The polio victim has to take a taxi, and the epileptic, if he is in difficult circumstances, has to have special help. We could multiply the individual cases of hardship a hundredfold, but I do not propose to do so.
I should like to read what the Royal Commission said. Paragraph 202 states:
 Our general conclusion is that grave disability ought to be the subject of allowance.
That is categorical; there is no equivocation about it. The Report goes on:
 It presents itself to us as a personal circumstance that sets apart those who suffer from it and directly affects their relative capacity to pay. We do not mean that it affects their earning capacity.
The category which we are putting forward to the Financial Secretary is that of those people who come into the Income Tax group. The Report goes on:
 What we are thinking of is a range of additional expense attendant upon the conduct of their normal life not least upon the maintenance of their earning capacity, which yet goes unrelieved under the existing code.


What the Commission means by that, as I understand it, is that they shall have such relief as will be able to help them to maintain their earning capacity, because unless they get certain relief, the expense which they endure through their disability makes it very difficult for them to work to 100 per cent. capacity.
We have pressed this point for many years to successive Governments, and I can only hope that the Financial Secretary and his right hon. Friend will, at any rate, see their way this time to give some concession such as that for which we are asking.

Mr. Arthur Holt: I am very glad to have this opportunity of saying a few words about these two Clauses, in particular the one referring to blind persons. It is about two years since I first wrote to the Chancellor of the Exchequer about having some tax relief for blind persons who have to pay for the upkeep of a guide dog. I should like to tell the Committee of a particular case in my constituency. No doubt hon. Members can think of many similar circumstances in their own constituencies.
The case is that of a man who has done everything he possibly can to avoid being a burden on the community as a result of this tragic physical disability. He is completely blind, yet he is able to do the job of being a telephonist. He is also an excellent pianist and runs a small dance band of about three or four people. He probably has quite a modest income as a result, but that is not the point. In the days when so many people are a cost on the State, we should look kindly towards those who do all they can to overcome their own difficulties and not be a burden on the State.
However, we should not just leave it at that. We should see whether the State can do something to overcome the extra cost of the disability which such people suffer. This man was taken to work every day by his guide dog. It is impossible for him to get any relief from taxation on that account. He cannot have it allowed as a business expense, or anything of that nature, but it probably costs him at least £1 a week.
It would be quite reasonable for the Chancellor to accept the validity of the

argument that something should be done towards helping these people to meet the extra cost which they incur by the very fact of their being blind. As the total cost would be very small, I hope that the Chancellor will not use the argument that because of the economic situation he cannot afford to give something of his huge surplus to meet what, for these people, is a reasonable and heartfelt need.

Dr. Horace King: It is a privilege to support a new Clause which has been moved by my hon. Friend the Member for Tottenham (Sir F. Messer), whose life is a monument of service to disabled, aged and sick people, and which is supported by my hon. Friend the Member for Lowestoft (Mr. Edward Evans), who has devoted most of his life to doing what he can for the totally deaf.
Recently, I attended the annual conference of B.L.E.S.M.A., the organisation of limbless ex-Service men, and, later, the annual conference of the Inskip Fellowship, a similar gathering of totally or partially disabled civilian people. No one who attended either of those functions and met the limbless folk there could hesitate to back a new Clause of this character.
I am glad that my hon. Friend the Member for Tottenham emphasised that this is not a charitable appeal, that the totally disabled folk want no pity, but, rather that, if there is any pity, anyone who has been in contact with the 100 per cent. disabled men and women would feel some pity for the abled-bodied moaners who fail to live their lives with the cheerfulness and courage shown by those folk.
9.45 p.m.
To me, the case is the quite simple one that the money which a 100 per cent. disabled person gets has not the same value as the money which an able person can get. Whatever the disabled person has to help him to live, he has to pay for many things that we can do for ourselves or our friends are willing to do for us.
It may be argued that we have done very much indeed for our disabled folk. I would yield to no one in my tribute to what we do for the totally disabled ex-Service men in the way of additional allowances—all add up to very useful pieces of social work; but nobody who has ever known a totally disabled man or woman could say that the comforts allowance, the unemployability allowance or


the constant attendance allowance adequately compensate for the 100 per cent. disability that they suffer.
When they feed, when they clothe, when they move from place to place, when they go in search of a job and when they read, they incur expenses that the totally able person does not have to incur. Any relief that the Chancellor can give them along the lines of the new Clause could be used for further instruments or gadgets, on the one hand, or for further devices or comforts, on the other hand, to make their lives a little nearer the fuller life of a normal human being.
I would only add to what has been said in this debate, that the new Clause is dead on the line of the recommendations of the Royal Commission, to which so much tribute is being paid in the Finance Bill debates and most of whose recommendations we hope some time some Chancellor will put on the Statute Book. Having argued the case for the need to give tax relief to the disabled man in the passage quoted by my hon. Friend the Member for Lowestoft, the Royal Commission then said, in paragraph 203:
We thought it right to concentrate upon some extreme measure of disability, because, if there is to be an allowance at all, it should, at any rate initially, be related to personal circumstances which are reasonably capable of identification and which demonstrably set the person concerned apart from others. We made a number of enquiries in quarters that we thought might assist us: and we came to the conclusion that the standard that we ought to recommend to qualify for a disability allowance should be that of 100 per cent. or total disablement as applied by the Ministry of Pensions (as it then was) for the purposes of war pensions.
Later in the same paragraph the Royal Commission recommended that the concession which is granted to the 100 percent. disabled should be the exemption of the £100 named in the new Clause. I hope that the Chancellor will see fit to accept this very moderate, practical and useful proposal.

Mr. A. Blenkinsop (Newcastle-upon-Tyne, East): I want to give just one quite simple illustration of the type of case we have in mind in the new Clause relating to the 100 per cent. disabled, which is well known to me and, I think, to many of my hon. Friends. It is that of a man who, for many years, has been severely paralysed and who through the greater part of his life, and increasingly so today,

has had to have paid attendants to help him very courageously to carry on with his job of teaching, which he still manages, amazingly, to pursue.
Every year that goes by the problem for him becomes greater because, among other things, he becomes heavier. All his movements today have to be assisted and that means that, in order that he may get to his school to teach, he needs the help of the St. John Ambulance men, which has to be paid for, and although those whom he lives with in his home manage to look after him, one wonders how long it will be possible for them to do so because his disability, I am afraid, inevitably increases.
In this case, which I suggest is typical of a number of cases of this kind, we all rightly pay tribute to men who manage to overcome their severe disabilities with so much courage and good will. There is no doubt about the added expense in which they are involved while contributing to our society and our community very greatly indeed, as undoubtedly they do. Therefore, although I fully appreciate some of the difficulties which are involved in providing an allowance of this kind, particularly as in this case the man is not entitled to a war disability pension or an industrial injuries disablement pension, there is no question about the rate of his disability, and the need is certainly there.
I feel that, although this matter has been raised on many occasions before, it would he a very gracious thing if the Financial Secretary could find it possible to examine this proposal and announce today that he was willing to make a grant of this nature.

Mr. George Chetwynd: May I add two points which, I think, will emphasise the arguments already made by my hon. Friends? First, on medical grounds, I think it is most important that these men should be doing a job of work. It is of use to them and of use to the country that, whatever it is they are doing, they should be enabled to do it. If, by lack of resources, they are forced to give up their employment, I think that we shall be so much the poorer as a result, that they will be so much the worse physically with their handicap, and that their deterioration will be all the more rapid.
There are cases, as I know from my personal experience, where men, because of lack of finance, have had to give up the special means by which they get to their work or the special help which enables them to do their job, and, consequently, they have quickly "faded away."
Secondly, it is an argument on economic grounds that if the Treasury does not give an allowance like this, and these men fall out of employment, they become chargeable to the State under National Assistance or under pensions, and I am absolutely certain that it would cost the State far more to keep these people by that means than it would to give them what I think is a very justifiable concession. I hope that the Financial Secretary will bear these points in mind when he is considering the sympathetic appeal which has been made to him.

Mr. Victor Collins: My hon. Friend the Member for Tottenham (Sir F. Messer), in moving this new Clause, did so all the more effectively because he deliberately eschewed emotion. Nevertheless, I think that it is impossible not to bear in mind that these men are suffering a very severe handicap, and the Clauses are regarded as making some kind of compensation which is badly needed by those so handicapped.
Like some of my hon. Friends, the whole of my working life has been spent directly or indirectly with totally disabled people. particularly blind persons. It is impossible for anyone in constant contact with very badly disabled people to have anything but a tremendous admiration for the courage with which they face their difficulties. It is such that they completely ignore the difficulties with which they are confronted. But there is one thing which they cannot ignore, which is that, by reason of that severe disability, they are under a special handicap which eventually involves finance.
I should like the Financial Secretary to tell the Committee how much this concession would cost. I do not want him to emphasise the technical difficulties because I believe that with good will they could be overcome. There are, I believe, some 12,000 severely disabled persons at work. That category may be larger than

the category of the 100 per cent. disabled people mentioned in the Clause, but, in any case, the ceiling is about 12,000. About 6,000 of these people are in Remploy and the other 6,000 in other institutions. The average wage of the 6,000 in Remploy is about £7 10s. a week. Many of them do not pay Income Tax, but to those who do—single men and others—this concession would probably mean that they also would be relieved of paying income tax altogether.
It would be an excellent thing indeed if people with low incomes, and who were severely disabled, were not required to pay Income Tax. Those with much higher incomes would, subject to this concession, still pay Income Tax. At present, blind persons receive special concessions, but if this suggestion were adopted there would be uniform treatment for all severely disabled people. I should not like to argue whether total blindness is a greater disability than some of the other kinds of disabilities I have mentioned, but I think that there should be uniformity of treatment.
There is the matter of expenses which severely handicapped people incur. In my division, spastics and people suffering from poliomyelitis come to the swimming baths every fortnight on a Sunday. It takes a long time to persuade them that they can safely enter a swimming bath and for them to get the necessary confidence. But there are devoted instructors who give their time without charge. There is an extremely happy atmosphere. We eventually have competitions and a gala, and this activity does a tremendous amount of good.
Most of those who now attend are young people, but there are some adults among them. The activity has done great things for them and has improved their physical condition. The point I am trying to make is that they have to get to the swimming baths. Some are taken there by friends, but some are not. For the latter class it involves extra cost and extra effort to get this tremendous pleasure. I hope that the Financial Secretary will tell us, first, what the concession would cost, and, secondly, that the country can afford the small amount involved in giving these brave people a relief that we can well afford to give them.

10.0 p.m.

Mrs. Harriet Slater: In supporting the new Clause, I should like to reinforce the arguments which have been advanced that these disabled people are often carrying on with their work and that if they were not doing so they would become an added burden to the State. It is of psychological value that, as far as possible, they should be able to continue with their jobs; it does them good.
My hon. Friends have mentioned mainly men, but there are innumerable cases of severely handicapped women, who have to pay for someone to do their housework so that they may continue with their jobs. In addition, as my hon. Friend the Member for Shoreditch and Finsbury (Mr. Collins) said, they have the difficulty of getting to their places of employment.
I know a teacher who is carrying on her work under extreme difficulties. For years she has hardly been able to walk, and yet she carries out her job in the classroom in such a way that Her Majesty's Inspectors have repeatedly, when visiting the school, commended her on her share of the work which she undertakes. She is a spinster, and she has to have a housekeeper to look after her, because after she has done a day's work at school she cannot do her normal housework.
She is unable to claim Income Tax allowance for her housekeeper, and, in addition, she has to pay someone to take her to school and bring her home again. We are crying out for teachers. Years ago, had she not had plenty of pluck, she could have given up her job, sat back and received National Assistance or some other benefit. Because of her training and her great interest in her work, she wishes to continue with her work.
When the Financial Secretary gives consideration to this new Clause, I hope he will also consider the case of the single woman who has to have a housekeeper and someone to help her get to her job.

Mr. H. Brooke: This is a very difficult matter, which has been debated on previous occasions. It fell to the Labour Government once to resist a plea for tax relief of a similar character to the disabled. The hon. Member for Newcastle-upon-Tyne, East (Mr. Blenkinsop) was

quite right when he said that the subject had been debated frequently in the House.
This time we have before us a recommendation of the Royal Commission, and it is that, I know, on which at least one of the new Clauses is based. I should like to say how much I appreciate the manner in which the Clause was moved by the hon. Member for Tottenham (Sir F. Messer) and the very reasonable and understanding way in which it has been debated.
It is a difficult and heart-searching subject, and the fundamental question is whether it is right to help disabled people by tax relief. The hon. Member for Itchen (Dr. King) said that the first new Clause was "dead on the line" of the Royal Commission Report, but in fact that is not quite accurate. Briefly, the Royal Commission said that there should be a disability allowance for which the standard should be that of 100 per cent. disablement as applied by the Ministry for the purpose of war pensions, and it contemplated an allowance at not less than £100.
It added, however—and this is the point the hon. Member overlooked—that allowances should not be given in addition to tax-free disability benefits and that the person should have the right to choose between receiving benefits which are not subject to tax, such as a war disability pension, and receiving the proposed tax allowance in respect of disablement. It is only fair to point out that that proviso is not included in the new Clause, which suggests a straight tax allowance of £100.
It is easy to calculate that, in the case of the disabled person who is qualified here and who has an income sufficient to bring him on to the standard rate of Income Tax, the value would be £42 10s. a year. It would be less for those with smaller incomes, and for very large numbers of disabled people who are not subject to Income Tax the new Clause would have no value at all. While I am not suggesting that that is an absolute reason against accepting the new Clause, I think we must recognise that its effect would be to give the most advantage to the people with the larger incomes and would, in fact, give nothing at all to the less well off.
What I am asking the Committee to consider is whether the needs of the disabled are best met by tax reliefs rather than by the social services. Several hon. Members suggested that this disability allowance would be of special value because it would be intended in the mind of Parliament to take account of the extra expenses that disabled people have to incur but, of course, it is, by the words of the Clause—and indeed in the conception of the Royal Commission—tied to 100 per cent. disability rather than to loss of earning capacity or to the additional expenses which that disability involves.
Both the Royal Commission and the new Clause itself envisage that this should be based on a 100 per cent. disability, but we have to be practical people on both sides of the Committee and consider whether it would be possible and reasonable to stop there. After all, a person who has had both legs amputated below the knee will be a 100 per cent. disability case. The person who has had one leg amputated above the knee will be a 90 per cent. disability case. The Clause would give full tax relief to the first and nothing at all to the second person, and I must ask the Committee to consider in its own mind whether, in fact, such a position would be acceptable to public opinion. I have the greatest respect for the wonderful work which the Royal Commission did, but in this case I am not sure whether it worked out for itself all the consequences that would, in my practical view, inevitably flow from its general recommendation.
There is another point, which is not covered by the Clause at all. The hon. Lady the Member for Stoke-on-Trent, North (Mrs. Slater) mentioned the unmarried woman. We have to keep in mind also the case of the man whose wife is disabled. There is nothing in this Clause which would assist there. There is no provision made for such a case.

Sir F. Messer: It could be put in.

Mr. Brooke: What I have to address myself to is the Clause as it is on the Order Paper. I am pointing out that this is not as simple a matter as it may seem to some who look at it for the first time.

Sir F. Messer: I am obliged to the right hon. Gentleman for giving way. If he will be prepared to accept the new Clause as it stands, we will promise to move the necessary Amendment on Report.

Dr. Edith Summerskill: The right hon. Gentleman will forgive me, I know, but I find it extremely difficult to follow his logic in this case. Has he not examined our social legislation before making this speech? He will find there that there are cases—pneumoconiosis cases, for example—where the man suffering from a complete disability was given a certain compensation but the partially-disabled man was not. If the right hon. Gentleman cares to inquire, he will find that there is case after case where the House of Commons, as it has done on many occasions, has not always felt it had to find an absolutely 100 per cent. cast-iron case for doing something which most people would say was human and was highly desirable. Surely, he is not going to argue that the man with two legs amputated should not be compensated because the man with one leg amputated is not?

Mr. Brooke: I am perfectly aware of those other types of case which the right hon. Lady has mentioned. What I am putting to the Committee is that this new Clause is confined to the case of 100 per cent. disability. I do not myself believe that a solution on those lines would be acceptable to the country. [Interruption.] What I have to argue about is the new Clause as it stands on the Paper, not some other Clause which hon. Members might have put down if they wished. I am trying to be perfectly fair to the Committee and to answer the points raised in the debate.
There is a further point which I do not think the Royal Commission examined at all. In this new Clause, paragraph (a) is relatively simple because it refers to the war disabled and industrial injury pensioner. Paragraph (b) is to extend the relief to those who are not in receipt of a pension of that kind but who nevertheless are
 disabled in manner and degree equivalent to one hundred per cent. disablement.
The whole Committee will recognise that that raises very big questions of adjudication. We have no arrangements in this country by which we decide


whether a person who is not an ex-Service man injured in the war or an industrial injury pensioner, but who is suffering disability, can get an assessment as to whether his disability is equal to 100 per cent. disablement or not.

Dr. King: rose—

Sir F. Messer: There are the arrangements in regard to the blind.

Mr. Brooke: May I be allowed to finish what I am saying? I am fully aware of the special case of the blind. What I am seeking to point out to the Committee is that, whereas the recommendation of the Royal Commission seems at first sight not only deserving of sympathy but also simple, the implementation of this new Clause would involve setting up a nation-wide medical service to determine whether people were entitled to relief or not.

Mr. Edward Evans: I thought I had explained, when supporting my hon. Friend the Member for Tottenham (Sir F. Messer) in his plea for the acceptance of this new Clause, that machinery already exists. There is the disablement resettlement service under the Ministry of Labour, and, under the welfare clauses of the National Assistance Act, which I mentioned earlier, there is a provision for the maintenance by local authorities of a register of disabled persons. In order to get on that register, people have to be examined, and it is the responsibility of the local medical officer of health whether a man's name is put on that register. I admit it is not entirely mandatory yet. but over 70 per cent. of local authorities have submitted schemes. There we have the register already in being. I submit to the Government that is a perfectly valid answer to the objections made by the right hon. Gentleman.

Mr. Brooke: I am not arguing that the machinery for this purpose would be impossible to bring into existence.

Mr. Evans: It is in existence.

Mr. Brooke: What I am saying to the Committee is that we have not got arrangements at present, without taking on large numbers of additional medical staff and so forth, to arrive at an assessment of whether or not large numbers of people are in fact suffering from disable-

ment equivalent to 100 per cent. and therefore entitled to tax relief of up to £42 10s. a year.

10.15 p.m.

Dr. King: One would concede that the estimating of 100 per cent, disability is difficult—the Royal Commission conceded that—but would the right hon. Gentleman not agree that what has been done in the Ministry of Pensions and National Insurance in the assessing of 100 per cent. disability—an assessment which is rarely challenged and which has given satisfaction to the whole country—shows that we have the machine, the experience and the knowledge now to fix quite satisfactorily for the whole community what we mean by 100 per cent. disability?

Mr. Brooke: The matter is more complicated than even the hon. Member for Itchen (Dr. King) realises. If we have a Clause like this on the Statute Book, we must be in a position to make an assessment of disability, not only in the normal cases of war disablement and industrial injury, but in other types of illness such as bronchitis, asthma, thrombosis, and so on. Many people suffering from such ailments might genuinely believe that they were equivalent to the 100 per cent. disabled, and in a tax matter it is essential to have an arrangement that will settle definitely and beyond dispute whether a person is entitled to a tax relief or not. I know how complicated the tax machine is, but one cannot do this by averages or by adjustments or anything like that. One has to get the decision "Yes" or "No."
I realise from what the hon. Member for Lowestoft (Mr. Edward Evans) said when he was good enough to bring a deputation to see me on this subject as it affected blind people that in the case of the blind there is a register, so that these questions of demarcation and delimitation do not arise in the same way as for the rest of the disabled. At the same time, it would be difficult to argue that all registered blind people were, in fact, as fully entitled, perhaps more entitled, to benefit of tax relief than many types of people who are suffering from some other disability which it would be hard to assess if the tax relief of this kind were to exist. It would be wrong to single out one disability just because it can be easily defined and to do it for those people but not for anyone else.

Mr. Edward Evans: Would the right hon. Gentleman not agree that the blind have always attracted special attention and special legislation? They have the Blind Persons Act, 1920, and a succession of special enactments. They attract not only special legislation, but special sympathy and voluntary effort also.

Mr. Brooke: I know that the blind attract special sympathy, and I hope the hon. Member will agree that I gave his deputation a sympathetic hearing.
In the case of the blind, however, it is possible to arrive at figures. The hon. Member for Shoreditch and Finsbury (Mr. Collins) asked what the implementation of the new Clauses would cost. It is extremely difficult to say how many people would qualify under the first of the new Clauses. Under the second new Clause, we know that there are some 95,000 registered blind people, of whom 80,000 are in receipt of National Assistance; so it is most improbable that any of these would be liable to Income Tax. The maximum number of people, therefore, who could benefit by the second new Clause in any degree are the 15,000 registered blind who are not receiving National Assistance.
I grant at once that among those with the far-reaching disabilities to which people who suffer from some kind of serious incapacity are subject, some of the difficulties are financial. To a large extent their financial difficulties are mitigated by our system of social services. What these new Clauses urge is that in addition there should be an Income Tax relief. That is a type of action which has been rejected by Governments of different colours, and one of the reasons why it has been rejected is that the Income Tax relief method is a hit and miss method.

Mr. Aneurin Bevan: Would the right hon. Gentleman explain how it is possible more easily to assess the disability of a person who has been industrially injured than that of the person who has not been?

Mr. Brooke: I think I made clear that there are a number of serious illnesses which very rarely arise in industrial injury or in war disablement.

Mr. Bevan: The injury may affect the capacity of the person who is injured in exactly the same way as disease may

affect the capacity of a person. They are both capable of assessment. There is no difference there at all, either qualitatively or quantitatively, except as the board decides.

Mr. Brooke: The right hon. Gentleman, if he listened to the earlier part of my speech, will, I am sure, recognise that I was not resting my case on the argument that it was impossible to do this. What I said was that it would need a very substantial enlargement of our existing medical boards and appeal tribunals if we were to have to reach decisions on very considerable numbers of people whose disability has not at present to be assessed.
Hitherto it has been the view of all Governments of all colours that the case of the disabled is better dealt with and assisted through social services than through tax reliefs, and the case which I am putting to the Committee is that this remains true despite the attractive recommendation of the Royal Commission. I have pointed out that the first of the Clauses under debate itself goes a great deal farther than the recommendation of the Royal Commission.
I trust I have made it clear, even though I can sense that a number of hon. Members have not been fully convinced by what I have said—I expected that at the outset—as everybody speaking from this Box for previous Governments has felt when he has been resisting such a Clause as this.

Mr. Holt: The right hon. Gentleman has said several times that some of the difficulties of the blind people are mitigated by social services. Will he explain what social services mitigate the difficulty of a blind person of getting about? Surely it is only reasonable that a blind person who earns an income should have some relief for such an aid as a guide dog?

Mr. Brooke: The hon. Member is now suggesting that we should have a tax relief that is related to the additional expenses in getting about which certain people have, but that is not the proposal here, because some of these people affected by the new Clause would suffer additional expense in that way and others would not. Moreover, it is at any rate open to argument whether one should seek by tax relief to benefit a person who


is travelling about to earn his livelihood if one is withholding similar assistance from somebody who is tied to his home and not earning his livelihood. All these matters are, as I was seeking to put to the Committee, very complicated.
My right hon. Friend has considered with the utmost care the clear-cut recommendation of the Royal Commission which, I hope both sides of the Committee will accept, was rather wiser than this Clause, which has left out half of the Royal Commission's recommendations. For the reasons I have put to the Committee, my right hon. Friend feels that he cannot recommend the Committee to accept the Royal Commission's recommendation any more than previous Chancellors of the Exchequer of different Governments have felt able to advise Parliament that it would be right to deal with the problem of the disabled by means of tax relief. As the Clause omits an important part of the Royal Commission's recommendation, a fortiori my right hon. Friend feels that it would be unwise to write this into the Finance Bill.

Mr. Douglas Jay: I think that the Financial Secretary's speech was one of the most disappointing and unconvincing that we have ever heard. He gave the impression that he was not so much trying to meet this real human problem as attempting to find reasons for doing nothing. It is no use his saying that this is not the ideal Clause, because he knows quite well that if he were prepared to move a technically better Clause on Report to do the same thing we should all support him.
It is no good the right hon. Gentleman saying that because the Clause does not alleviate all the suffering we should not alleviate any suffering at all, for if we acted on that principle we should never improve anything. Nor is it any good his saying that we have debated this matter often before and have come to the same conclusion. In the last two years we have had the Report of the Royal Commission on the Taxation of Profits and Income, which came down for the first time in favour of this proposal.
It is rather extraordinary that in the whole matter of personal allowances the

present Government, in four Budgets over the last two years, have hardly accepted a single one of the Commission's recommendations. The Commission's Report entirely accepts the arguments which were put forward so persuasively by my hon. Friend the Member for Lowestoft (Mr. Edward Evans). It argues that total disability impairs the capacity of the individual to earn an income and makes the mere conduct of life more expensive, and that constitutes a valid reason not for a social service but for a tax relief of this form.
The Commission then considers the practical difficulties of which the Financial Secretary spoke. It recognises the fact that the Ministry of Pensions, as it then was, has solved this administrative difficulty by the system of 100 per cent. disablement and it recommends in substance precisely what we are now putting before the Committee. The Financial Secretary does not deny that this is possible and that it costs almost nothing at all, and he cannot deny, with this great authority of the Commission behind it, that it would go a long way to assist people who need and deserve help of this kind.
In those circumstances, I would ask the Financial Secretary, even though he may have been instructed to give this very bleak and negative answer, to see whether he cannot think again and tell us, even now, that he will at least consider what is obviously the feeling of almost the whole Committee on this matter—

Mr. W. R. Rees-Davies: No.

Mr. Jay: —with the exception of a very few hon. Members below the Gangway who have not taken part in the debate.
I would ask the Financial Secretary whether he cannot make a better suggestion on Report. If the right hon. Gentleman says that he is unable to do that, I would advise my hon. Friends to press the matter to a Division.
Question put, That the Clause be read a Second time:—

The Committee divided: Ayes 199, Noes 241.

Division No.225.]
AYES
[9.9 p.m.


Ainsley, J. W.
Dye, S.
Lee, Miss Jennie (Cannock)


Albu, A. H.
Ede, Rt. Hon. J. C.
Lever, Leslie (Ardwick)


Allaun, Frank (Salford, E.)
Edwards, Rt. Hon. Ness (Caerphilly)
Lewis, Arthur


Allen, Arthur (Bosworth)
Edwards, W. J. (Stepney)
Lindgren, G. S.


Allen, Soholefield (Crewe)
Evans, Albert (Islington, S.W.)
Logan, D. G.


Anderson, Frank
Evans, Edward (Lowestoft)
Mabon, Dr. J. Dickson


Awbery, S. S.
Evans, Stanley (Wednesbury)
MacColl, J. E.


Bacon, Miss Alice
Fernyhough, E.
McGhee, H. G.


Balfour, A.
Fienburgh, W.
McGovern, J.


Bellenger, Rt. Hon. F. J.
Fletcher, Eric
McInnes, J.


Bence, C. R. (Dunbartonshire, E.)
Forman, J. C.
McKay, John (Wallsend)


Benn, Hn. Wedgwood (Bristol, S.E.)
Fraser, Thomas (Hamilton)
McLeavy, Frank


Benson, G.
Gibson, C. W.
MacPherson, Malcolm (Stirling)


Beswick, F.
Gordon Walker, Rt. Hon. P. C.
Mahon, Simon


Bevan, Rt. Hon. A. (Ebbw Vale)
Grey, C. F
Mallalieu, E. L. (Brigg)


Blackburn, F.
Griffiths, David (Bother Valley)
Mann, Mrs. Jean


Blenkinsop, A.
Griffiths, Rt. Hon. James (Lianelly)
Marquand, Rt. Hon. H. A.


Blyton, W. R.
Griffiths, William (Exchange)
Mason, Roy


Boardman, H.
Grimond, J.
Mayhew, C. P.


Bottomley, Rt. Hon. A. G.
Hale, Leslie
Messer, Sir F.


Bowden, H. W. (Leicester, S.W.)
Hall, Rt. Hn. Glenvil (Colne Valley)
Mikardo, Ian


Bowen, E. R. (Cardigan)
Hamilton, W. W.
Mitchison, G. R.


Bowles, F. G.
Hannan, W.
Monslow, W.


Boyd, T. C.
Harrison, J. (Nottingham, N.)
Moody, A. S.


Braddock, Mrs. Elizabeth
Hastings, S.
Morris, Percy (Swansea, W.)


Brockway, A. F.
Hayman, F. H.
Morrison,Rt.Hn.Herbert(Lewis'm,S.)


Broughton, Dr. A. D. D.
Hobson, C. R.
Mort, D. L.


Brown, Rt. Hon. George (Belper)
Holman, P.
Moss, R.


Brown, Thomas (Ince) Burton, Miss F. E.
Holmes, Horace
Moyle, A.


Butler, Herbert (Hackney, C.)
Holt, A. F.
Mulley, F. W.


Callaghan, L. J.
Howell, Charles (Perry Barr)
Neal, Harold (Bolsover)


Castle, Mrs. B. A.
Howell, Denis (All Saints)
Noel-Baker, Rt. Hon. P. (Derby, S.)


Champion, A. J.
Hubbard, T. F.
O'Brien, Sir Thomas


Chapman, W. D.
Hughes, Cledwyn (Anglesey)
Oliver, G. H.


Chetwynd, G. R.
Hughes, Emrys (S. Ayrshire)
Orbach, M.


Clunie, J.
Hughes, Hector (Aberdeen, N.)
Oswald, T.


Coldrick, W.
Hunter, A. E.
Owen, W. J.


Collick, P. H. (Birkenhead)
Isaacs, Rt. Hon. G. A.
Padley, W. E.


Collins, V.J. (Shoreditch &amp; Finsbury)
Janner, B.
Paget, R. T.


Cove, W G.
Jay, Rt. Hon. D. P. T.
Paling, Rt. Hon. W. (Dearne Valley)


Craddock, George (Bradford, S.)
Jeger, George (Goole)
Paling, Will T. (Dewsbury)


Cronin, J. D.
Jeger,Mrs.Lena(Holbn &amp; St.Pancs,S).
Palmer, A. M. F.


Crossman, R. H. S.
Johnson, James (Rugby)
Pargiter, G. A.


Cullen, Mrs. A.
Jones, David (The Hartlepools)
Parker, J.


Darling, George (Hillsborough)
Jones, Elwyn (W. Ham, 8.)
Parkin, B. T.


Davies, Ernest (Enfield, E.)
Jones, Jack (Rotherham)
Paton, John


Davies, Stephen (Merthyr)
Jones, J. Idwal (Wrexham)
Peart, T. F.


Deer, G.
Jones, T. W. (Merioneth)
Price, J. T. (Westhoughton)


Delargy, H. J.
Kenyon, C.
Price, Philips (Gloucestershire, W.)


Dodds, N. N.
Key, Rt. Hon. C. W.
Probert, A. R.


Dugdale, Rt. Hn. John (W. Brmwch)
King, Dr. H. M.
Proctor, W. T.



Lawson, G. M.
Pryde, D. J.



Lee, Frederick (Newton)
Randall, H. E.




NOES


Agnew, Cmdr. P. G.
Duncan, Capt. J. A. L.
Joseph, Sir Keith


Aitken, W. T.
Eccles, Rt. Hon. Sir David
Joynson-Hicks, Hon. Sir Lancelot


Allan, R. A. (Paddington, S.)
Eden, J. B. (Bournemouth, West)
Kaberry, D.


Alport, C. J. M.
Elliot, Rt. Hon. W. E.
Keegan, D.


Amory, Rt. Hn. Heathcoat (Tiverton)
Errington, Sir Eric
Kerby, Capt. H. B.


Anstruther-Gray, Major Sir William
Erroll, F. J.
Kerr, H. W.


Arbuthnot, John
Farey-Jones, F. W.
Kershaw, J. A.


Armstrong, C. W.
Fell, A.
Kimball, M.


Ashton, H.
Finlay, Graeme
Kirk, P. M.


Atkins, H. E.
Fisher, Nigel
Lagden, G. W.


Baldock, Lt,-Cmdr. J. M.
Fleetwood-Hesketh, R. F.
Lambert, Hon. G.


Baldwin, A. E.
Fletcher-Cooke, C.
Lambton, Viscount


Balniel, Lord
Foster, John
Leavey, J. A.


Barber, Anthony
Fraser, Sir Ian (M'cmhe &amp; Lonsdale)
Leburn, W. G.


Barlow, Sir John
Freeth, D. K.
Legge-Bourke, Maj. E. A. H.


Barter, John
Galbraith, Hon. T. G. D.
Legh, Hon. Peter (Petersfield)


Baxter, Sir Beverley
Gammans, Sir David
Lindsay, Hon. James (Devon, N.)


Bell, Philip (Bolton, E.)
Garner-Evans, E. H.
Lindsay, Martin (Solihull)


Bell, Ronald (Bucks, S.)
Glover, D.
Linstead, Sir H. N.


Bennett F. M. (Torquay)
Godber, J. B.
Lloyd, Maj. Sir Guy (Renfrew, E.)


Bennett, Dr. Reginald
Gomme-Duncan, Col. Sir Alan
Longden, Gilbert


Bevins, J. R. (Toxteth)
Gough, C. F. H. 
Low, Rt. Hon. A. R. W.


Bidgood, J. C.
Gower, H. R.
Lucas, P. B. (Brentford &amp; Chiswick)


Birch, Rt. Hon. Nigel
Graham, Sir Fergus
Lucas-Tooth, Sir Hugh


Bishop, F. P.
Grant, W. (Woodside)
McAdden, S. J.


Black, C. W.
Grant-Ferris, Wg Cdr.R. (Nantwich)
Macdonald, Sir Peter


Body, R. F.
Green, A.
McKihbin, A. J.


Bossom, Sir Alfred
Grimston, Hon. John (St. Albans)
Mackie, J. H. (Galloway)


Boyd-Carpenter, Rt. Hon. J. A.
Grimston, Sir Robert (Westbury)
McLaughlin, Mrs. P.


Boyle, Sir Edward
Gurden, Harold
Maclay, Rt. Hon. John


Braine, B. R.
Hall, John (Wycombe)
Macmillan,Rt. Hn.Harold (Bromley)


Braithwaite, Sir Albert (Harrow, W.)
Harrison, A. B. C. (Maldon)
Macpherson, Niall (Dumfries)


Bromley-Davenport, Lt.-Col. W. H.
Harrison, Col. J. H. (Eye)
Maddan, Martin


Brooke, Rt. Hon. Henry
Harvey,Air Cdre. A. V. (Macelesfd)
Maitland, Cdr. J. F. W. (Horncastle)


Browne, J. Nixon (Craigton)
Harvey, Ian (Harrow, E.)
Maitland, Hon. Patrick (Lanark)


Buchan-Hepburn, Rt. Hon. P. G. T.
Harvey, John (Walthamstow, E.)
Manningham-Buller, Rt. Hn. Sir R.


Bullus, Wing Commander E. E.
Harvie-Watt, Sir George
Markham, Major Sir Frank


Burden, F. F. A.
Hay, John
Marlowe, A. A. H.


Butcher, Sir Herbert
Heald, Rt. Hon. Sir Lionel
Marples, A. E.


Campbell, Sir David
Heath, Rt. Hon. E. R. G.
Marshall, Douglas


Carr, Robert
Hill, Mrs. E. (Wythenshawe)
Mathew, R.


Channon, H.
Hill, John (S. Norfolk)
Maude, Angus


Chichester-Clark, R.
Holland-Martin, C. J.
Mawby, R. L.


Cole, Norman
Hope, Lord John
Maydon, Lt.-Comdr. S. L. C.


Cooper-Key, E. M.
Hornby, R. P.
Medlicott, Sir Frank


Cordeaux, Lt.-Col. J. K.
Horobin, Sir Ian
Monckton, Rt. Hon. Sir Walter


Corfield, Capt. F. V.
Horsbrugh, Rt. Hon. Dame Florence
Morrison, John (Salisbury)


Craddock, Beresford (Spelthorne)
Howard, Hon. Greville (St. Ives)
Mott-Radclyffe, C. E.


Crowder, Sir John (Finchley)
Howard, John (Test)
Nabarro, G. D. N.


Crowder, Petre (Ruislip—Northwood) 
Hughes Hallet, Vice-Admiral, J.
Nairn, D. L. S.


Cunningham, Knox
Hughes-Young, M. H. C.
Neave, Airey


Currie, G. B. H.
Hulbert, Sir Norman
Nicholls, Harmar


Dance, J. C. G.
Hurd, A. R.
Nicholson, Godfrey (Farnham)


Davidson, Viscountess
Hutchison, Sir Ian Clark (E'b'gh,W.)
Nicolson, N. (B'n'm'th,E. &amp; Chr'oh)


D'Avigdor-Goldsmid, Sir Henry
Hyde, Montgomery
Nield, Basil (Chester)


Deedes, W. F.
Hylton-Foster, Sir H. B. H.
Noble, Comdr. A. H. P.


Dodds-Parker, A. D.
lremonger, T. L.
Nugent, G. R. H.


Donaldson, Cmdr. C. E. McA.
Irvine, Bryant Godman (Rye)
Nutting, Rt. Hon. Anthony


Doughty, C. J. A.
Jenkins, Robert (Dulwich)
Oakshott, H. D.


Drayson, G. B.
Jennings, J. C. (Burton)
O'Neill, Hn. Phelim (Co.Antrim, N.)


du Cann, E. D. L.
Jennings, Sir Roland (Hallam)
Ormsby-Gore, Hon. W. D.


Dugdale, Rt. Hen. Sir T. (Richmond)
Johnson, Dr. Donald (Carlisle)
Orr, Capt. L. P. S.



Johnson, Eric (Blackley)
Orr-Ewing, Charles Ian (Hendon, N.)




Ainsley, J. W.
Hale, Leslie
Paget, R. T.


Albu, A. H.
Hall, Rt. Hn. Glenvil (Colne Valley)
Paling, Rt. Hon. W. (Dearne Valley)


Allaun, Frank (Salford, E.)
Hamilton, W. W.
Palmer, A. M. F.


Allen, Arthur (Bosworth)
Hannan, W.
Pargiter, G. A.


Allen, Scholefield (Crewe)
Harrison, J. (Nottingham, N.)
Parker, J.


Awbery, S. S.
Hayman, F. H.
Pearson, A.


Bacon, Miss Alice
Hobson, C. R.
Peart, T. F.


Bellenger, Rt. Hon. F. J.
Holt, A. F.
Price, J. T. (Westhoughton)


Bence, C. R. (Dunbartonshire, E.)
Howell, Charles (Perry Barr)
Price, Philips (Gloucestershire, W.)


Benn, Hn. Wedgwood (Bristol, S.E.)
Howell, Denis (All Saints)
Probert, A. R.


Benson, G.
Hubbard, T. F.
Proctor, W. T.


Beswick, F.
Hughes, Emrys (S. Ayrshire)
Pryde, D. J.


Bevan, Rt. Hon A. (Ebbw Vale)
Hughes, Hector, (Aberdeen, N.)
Randall, H. E.


Blackburn, F.
Hunter, A. E.
Rankin, John


Blenkinsop, A.
Irving, S. (Dartford)
Redhead, E. C.


Blyton, W. R.
Isaacs, Rt. Hon. G. A.
Roberts, Albert (Normanton)


Boardman, H.
Jay, Rt. Hon. D. P. T.
Roberts, Goronwy (Caernarvon)


Bottomley, Rt. Hon. A. G.
Jeger, George (Goole)
Robinson, Kenneth (St. Pancras, N.)


Bowden, H. W. (Leicester, S.W.)
Jeger, Mrs. Lena(Holbn &amp; St.Pncs,S.)
Rogers, George (Kensington, N.)


Bowen, E. R. (Cardigan)
Johnson, James (Rugby)
Ross, William


Bowles, F. G.
Jones, Rt. Hon. A. Creech(Wakefield)
Royle, C.


Boyd, T. C.
Jones, David (The Hartlepools)
Short, E. W.


Braddock, Mrs. Elizabeth
Jones, Elwyn (W. Ham, S.)
Shurmer, P. L. E.


Brockway, A. F.
Jones, Jack (Rotherham)
Silverman, Julius (Aston)


Broughton, Dr. A. D. D.
Jones, J. Idwal (Wrexham)
Simmons, C. J. (Brierley Hill)


Brown, Rt. Hon. George (Belper)
Jones, T. W. (Merioneth)
Skeffington, A. M.


Burton, Miss F. E.
Kenyon, C.
Slater, Mrs. H. (Stoke, N.)


Butler, Herbert (Hackney, C.)
Key, Rt. Hon. C. W.
Slater, J. (Sedgefield)


Callaghan, L. J.
King, Dr. H. M.
Smith, Ellis (Stoke, S.)


Castle, Mrs. B. A.
Lawson, C. M.
Sorensen, R. W.


Champion, A. J.
Lee, Frederick (Newton)
Sparks, J. A.


Chapman, W. D.
Lee, Miss Jennie (Cannock)
Steele, T.


Chetwynd, G. R.
Lever, Harold (Cheetham)
Stewart, Michael (Fulham)


Clunie, J.
Lever, Leslie (Ardwick)
Stones, W. (Consett)


Coldrick, W.
Lewis, Arthur
Stross,Dr.Barnett(stoke-on-Trent,C.)


Collick, P. H. (Birkenhead)
Lindgren, G. S.
Summerskill, Rt. Hon. E.


Craddock, George (Bradford, S.)
Logan, D. G.
Sylvester, G. 0.


Cronin, J. D.
MacColl, J. E.
Taylor, Bernard (Mansfield)


Crossman, R. H. S.
McGhee, H. G.
Taylor, John (West Lothian)


Cullen, Mrs. A.
McInnes, J.
Thomas, Iorwerth (Rhondda, W.)


Davies,Rt.Hon.Clement(Montgomery)
McKay, John (Wallsend)
Thomson, George (Dundee, E.)


Davies, Ernest (Enfield, E.)
McLeavy, Frank
Thornton, E.


Davies, Stephen (Merthyr)
Mahon, Simon
Timmons, J.


Deer, G.
Mallalieu, E. L. (Brigg)
Tomney, F.


Delargy, H. J.
Mallalieu, J. P. W. (Huddersfd, E.)
Ungoed-Thomas, Sir Lynn


Dodds, N. N.
Mann, Mrs. Jean
Usborne, H. C.


Dugdale, Rt. Hn. John (W. Brmwch)
Marquand, Rt. Hon. H. A.
Wade, D. W.


Dye, S.
Mason, Roy
Warbey, W. N.


Ede, Rt. Hon. J. C.
Mayhew, C. P.
Weitzman, D.


Edwards, Rt. Hon. Ness (Caerphilly)
Messer, Sir F.
Wells, William (Walsall, N.)


Edwards, W. J. (Stepney)
Mikardo, lan
West, D. G.


Evans, Albert (Islington, S.W.)
Mitchison, G. R.
Wheeldon, W. E.


Evans, Edward (Lowestoft)
Monslow, W.
White, Mrs. Eirene (E. Flint)


Evans, Stanley (Wednesbury)
Moody, A. S.
White, Henry (Derbyshire, N.E.)


Fernyhough, E.
Morris, Percy (Swansea, W.)
Willey, Frederick


Fienburgh, W.
Moss, R.
Williams, David (Neath)


Fletcher, Eric
Moyle, A.
Williams, Rt. Hon. T. (Don Valley)


Forman, J. C.
Mulley, F. W.
Williams, W. R. (Openshaw)


Fraser, Thomas (Hamilton)
Neal, Harold (Bolsover)
Williams, W. T. (Barons Court)


Gibson, C. W.
Noel-Baker, Francis (Swindon)
Wilson, Rt. Hon. Harold (Huyton)


Gooch, E. G.
Noel-Baker, Rt. Hon. P. (Derby, S.)
Winterbottom, Richard


Cordon Walker, Rt. Hon. P. C.
O'Brien Sir Thomas
Woodburn, Rt. Hon. A.


Grey, C. F.
Cram, A. E.
Woof, R. E.


Griffiths, David (Rother Valley)
Orbach, M.
Yates, V. (Ladywood)


Griffiths, Rt. Hon. James (Llanelly)
Oswald, T.
Zilliacus, K.


Griffiths, William (Exchange)
Owen, W. J.



Grimond, J.
Padley, W. E.
TELLERS FOR THE AYES:




Mr. Holmes and Mr. Wilkins.




NOES


Agnew, Cmdr. P. G.
Baldock, Lt.-Cmdr. J. M.
Bennett, Dr. Reginald


Aitken, W. T.
Baldwin, A. E.
Bidgood, J. C.


Allan, R. A. (Paddington, s.)
Balniel, Lord
Birch, Rt. Hon. Nigel


Alport, C. J. M.
Banks, Col. C.
Bishop, F. P.


Amery, Julian (Preston, N.)
Barber, Anthony
Black, C. W.


Amory, Rt. Hn. Heathcoat (Tiverton)
Barlow, Sir John
Body, R. F.


Anstruther-Gray, Major Sir William
Barter, John
Bossom, Sir Alfred


Arbuthnot, John
Baxter, Sir Beverley
Boyd-Carpenter, Rt. Hon. J. A.


Armstrong, C. W.
Bell, Philip (Bolton, E.)
Boyle, Sir Edward


Ashton, H.
Bell, Ronald (Bucks, S.)
Braine, B. R.


Atkins, H. E.
Bennett, F. M. (Torquay)
Bromley-Davenport, Lt.-Col. W. H.







Brooke, Rt. Hon. Henry
Howard, John (Test)
Ormsby-Gore, Hon. W. D.


Buchan-Hepburn, Rt. Hon. P. G. T.
Hughes Hallett, Vice-Admiral J.
Orr, Capt. L. P. S.


Bullus, Wing Commander E. E.
Hughes-Young, M. H. C.
Orr-Ewing, Charles Ian (Hendon, N.)


Burden, F. F. A.
Hulbert, Sir Norman
Osborne, C.


Butcher, Sir Herbert
Hurd, A. R.
Page, R. G.


Carr, Robert
Hutchison, Sir Ian Clark (E'b'gh, W.)
Pannell, N. A. (Kirkdale)


Channon, H.
Hylton-Foster, Sir H. B. H.
Partridge, E.


Chichester-Clark, R.
lremonger, T. L.
Peyton, J. W. W.


Cole, Norman
Irvine, Bryant Godman (Rye)
Pickthorn, K. W. M.


Cooper-Key, E. M.
Jenkins, Robert (Dulwich)
Pilkington, Capt. R. A.


Cordeaux, Lt.-Col. J. K.
Jennings, J. C. (Burton)
Pitman, I. J.


Corfield, Capt. F. V.
Jennings, Sir Roland (Hallam)
Pitt, Miss E. M.


Craddock, Beresford (Spelthorne)
Johnson, Dr. Donald (Carlisle)
Pott, H. P.


Crowder, Petre (Ruislip—Northwood)
Johnson, Eric (Blackley)
Powell, J. Enoch


Cunningham, Knox
Joseph, Sir Keith
Price, Henry (Lewisham, W.)


Currie, G. B. H.
Joynson-Hicks, Hon. Sir Lancelot
Prior-Palmer, Brig. 0. L.


Dance, J. C. G.
Kaberry, D.
Raikes, Sir Victor


Davidson, Viscountess
Keegan, D.
Ramsden, J. E.


D'Avigdor-Goldsmid, Sir Henry
Kerby, Capt. H. B.
Rawlinson, Peter


Deedes, W. F.
Kerr, H. W.
Redmayne, M.


Dodds-Parker, A. D.
Kershaw, J. A.
Rees-Davies, W. R.


Donaldson, Cmdr. C. E. McA.
Kimball, M.
Renton, D. L. M.


Doughty, C. J. A.
Kirk, P. M.
Ridsdale, J. E.


Drayson, G. B.
Lagden, G. W.
Roberts, Sir Peter (Heeley)


du Cann, E. D. L.
Lambert, Hon. G.
Robinson, Sir Roland (Blackpool, S.)


Dugdale, Rt. Hn. Sir T. (Richmond)
Lambton, Viscount
Rodgers, John (Sevenoaks)


Duncan, Capt. J. A. L.
Leavey, J. A.
Roper, Sir Harold


Eden, J. B. (Bournemouth, West)
Leburn, W. G.
Russell, R. S.


Elliot, Rt. Hon. W. E.
Legge-Bourke, Maj. E. A. H.
Schofield, Lt.-Col. W.


Errington, Sir Eric
Legh, Hon. Peter (Petersfield)
Sharples, R. C.


Erroll, F. J.
Lindsay, Hon. James (Devon, N.)
Shepherd, William


Farey-Jones, F. W.
Lindsay, Martin (Solihull)
Simon, J. E. S. (Middlesbrough, W.)


Finlay, Graeme
Linstead, Sir H. N.
Smithers, Peter (Winchester)


Fisher, Nigel
Lloyd, Maj. Sir Guy (Renfrew, E.)
Spearman, Sir Alexander


Fleetwood-Hesketh, R. F.
Longden, Gilbert
Speir, R. M.


Fletcher-Cooke, C.
Lucas, P. B. (Brentford &amp; Chiswick)
Spens, Ftt. Hn. Sir P. (Kens'gt'n, S.)


Forrest, G.
McAdden, S. J.
Stanley, Capt. Hon. Richard


Fraser, Sir Ian (M'cmbe &amp; Lonsdale)
Macdonald, Sir Peter
Stevens, Geoffrey


Freeth, D. K.
Mackie, J. H. (Galloway)
Steward, Harold (Stockport, S.)


Galbraith, Hon. T. G. D.
McLaughlin, Mrs. P.
Steward, Sir William (Woolwich, W.)


Gammans, Sir David
Maclay, Rt. Hon. John
Stewart, Henderson (Fife, E.)


Garner-Evans, E. H.
Macmillan,Rt.Hn.Harold(Bromley)
Stoddart-Scott, Col. M.


Glover, D.
Maddan, Martin
Studholme, Sir Henry


Godber, J. B.
Maitland, Cdr. J. F. W. (Horncastle)
Summers, Sir Spencer


Comme-Duncan, Col. Sir Alan
Maitland, Hon. Patrick (Lanark)
Taylor, Sir Charles (Eastbourne)


Gough, C. F. H.
Manningham-Buller, Rt. Hn. Sir R.
Taylor, William (Bradford, N.)


Cower, H. R.
Markham, Major Sir Frank
Teeling, W.


Graham, Sir Fergus
Marlowe, A. A. H.
Thomas, Leslie (Canterbury)


Grant, W. (Woodside)
Marples, A. E.
Thompson, Kenneth (Walton)


Grant-Ferris, Wg-Cdr. R. (Nantwich)
Marshall, Douglas
Thornton-Kemsley, C. N.


Green, A.
Mathew, R.
Tiley, A. (Bradford, W.)


Grimston, Hon. John (St. Abans)
Maude, Angus
Tilney, John (Wavertree)


Grimston, Sir Robert (Westbury)
Mawby, R. L.
Touche, Sir Gordon


Gurden, Harold
Maydon, Lt.-Comdr, S. L. C.
Turner, H. F. L.


Harrison, A. B. C. (Maldon)
Medlicott, Sir Frank
Tweedsmuir, Lady


Harrison, Col. J. H. (Eye)
Monckton, Rt. Hon. Sir Walter
Vane, W. M. F.


Harvey, Air Cdre. A. V. (Macclesfd)
Morrison, John (Salisbury)
Vaughan-Morgan, J. K.


Harvey, Ian (Harrow, E.)
Nabarro, G. D. N.
Vickers, Miss J. H.


Harvey, John (Walthamstow, E.)
Nairn, D. L. S.
Vesper, D. F.


Head, Rt. Hon. A. H.
Heave, Airey
Wakefield, Edward (Derbyshire, W.)


Heald, Rt. Hon. Sir Lionel
Nicholls, Harmar
Wakefield, Sir Wavell (St. M'lebone)


Heath, Rt. Hon. E. R. G.
Nicholson, Godfrey (Farnham)
Wall, Major Patrick


Hill, Mrs. E. (Wythenshawe)
Nicolson, N. (B'n'm'th,E.&amp; Chr'ch)
Ward, Hon. George (Worcester)


Hill, John (S. Norfolk)
Nield, Basil (Chester)
Waterhouse, Capt. Rt. Hon. C.


Hinchingbrooke, Viscount
Noble, Cmdr. A. H. P.
Williams, Paul (Sunderland, S.)


Hirst, Geoffrey
Nugent, G. R. H.
Williams, R. Dudley (Exeter)


Holland-Martin, C. J.
Nutting, Rt. Hon. Anthony
Wood, Hon. R.


Hope, Lord John
Oakshott, H. D.
Yates, William (The Wrekin)


Hornby, R. P.
O'Neill, Hn. Phelim (Co. Antrim, N.)



Horsbrugh, Rt. Hon. Dame Florence

TELLERS FOR THE NOES:


Howard, Hon. Greville (St. Ives)

Mr. R. Thompson and Mr. Wills.

New Clause.—(RELIEF FROM INCOME TAX FOR DEVELOPMENT OF NEW METALLIFEROUS MINES WITHIN THE UNITED KINGDOM.

Exemption shall be granted from tax chargeable under Schedule D in respect of the profits of a trade set up after the fifth day of April, nineteen hundred and fifty-six, which consists of the working of a non-ferrous metalliferous mine within the United Kingdom, but such exemption to tax shall only apply to the profits derived from this operation of the mine during the period of thirty-six months commencing with the day on which the mine first came into regular production of ore. In this section "regular production of ore" means production in reasonable commercial quantities and shall not be deemed to apply to ore extracted in the development period in searching for or in discovering and testing deposits or in winning access thereto.—[Mr. D. Marshall.]

Brought up, and read the First time.

Mr. Douglas Marshall: 1 beg to move, That the Clause be read a Second time.

The Temporary Chairman (Sir Austin Hudson): I suggest that at the same time we should discuss the next proposed new Clause in the name of the same hon. Member, "Relief from profits tax for development of new metalliferous mines within the United Kingdom", and also the proposed new Clause in the name of the hon. Member for West Lothian (Mr. J. Taylor), "Exemption from excise duty of Scottish shale oil".

Mr. Marshall: The same principle underlies both Clauses in my name and that of my hon. Friends, and I can readily understand the second being allowed to be discussed with the first. If the Chancellor sees my argument for the first Clause, it would be reasonable to expect him to accept the second Clause as well.
No doubt the Chancellor has read the speech that I made during the Budget debate. Its purpose was to allow the Treasury to formulate opinion about the principle embodied in the two Clauses. The reason for the Clauses is clearly stated in them. There is, however, one matter which has caused a certain degree of confusion. There is another proposed new Clause which hon. Members may have thought had an application similar to those about which I am now speaking. This Clause to which I refer deals with

allowances in respect of capital expenditure on sources of mineral supplies, and this Clause would in no way help the Cornish mining belt. As the Cornish mines are leased on a royalty basis, the question of capital expenditure does not arise.
The Chancellor will no doubt remember certain words that he used at Newcastle on 25th May. He said:
 We have no raw materials except coal and iron, and now we are importing both.
I assume that he had temporarily forgotten our export of china clay, at present the United Kingdom's largest export of basic raw material. With regard to the metalliferous minerals to which I am referring, he may well have thought, as many of my right hon. Friends did when the Conservative Party was in opposition, that our method of taxation was such that the development of those minerals had been deterred, and, consequently, not sufficient of them was mined to form an export.
I am sure that my right hon. Friend will also have read a book by Mr. Lyde Caunter, which I sent him a short time ago, on the future of metalliferous mining in Great Britain. Mr. Caunter, the President of the Cornish Mining Development Association and a Governor of the Camborne School of Mines, puts very briefly and cogently the case that I am making tonight. A passage directly related to the Clause reads:
Those people who are in a position to judge the matter assert that the taxation laws of this country are the deterrent which stifles initiative at birth, with the result that the Treasury gets no revenue from new enterprises, and the country does not benefit from the production of the new wealth which would otherwise be produced.
10.45 p.m.
Home production of non-ferrous minerals is a matter of national importance. It is not a matter which concerns only those people who live in the different areas which may be able to produce these minerals. Many millions of pounds worth of these minerals still lie hid, a fact which is not disputed by anyone who has studied this subject. It may be of interest to the Committee to recollect that Madame Curie's first experiments were conducted with uranium ore obtained from a Cornish tin mine near St. Austell.
The object of the new Clause is to stimulate enterprise and, by that stimulation, to uncover this wealth. I assume that the Chancellor of the Exchequer will not suggest that his opposite numbers in Canada, Australia, Eire, and the United States of America, although out of step with him, are necessarily wrong. Sometimes it is reasonable to suppose that what is done on the other side of the Irish Sea may be a proper thing to do on this side of the Irish Sea.
All the nations which I have mentioned have produced legislation more or less in conformity with the new Clause. The latest to do that is Eire. It is interesting to note that since Eire passed this legislation, only a few months ago, there has been an immediate effect—an actual, "seeable" effect, not just something on paper—in Eire which is benefiting from that legislation.
Under the Canadian system, which is more or less embodied in the Clause, the metalliferous and non-bedded mines are not subject to Income Tax on income derived from the operation of the mine during a period of 36 months commencing with the day on which the mine came into production. Hon. and right hon. Members will note that those are more or less the words which my hon. Friends and I have selected for the Clause. We do not necessarily say that the Clause is properly drafted. It is the principle lying behind the Clause that is important. We do not have the access to the Parliamentary draftsmen which the Government, naturally, have.
Within the Canadian system there is a special depletion allowance made on a deduction of income of 33⅓ per cent. of the net aggregate profits; there are capital cost allowances with specially accelerated rates for periods of amortisation of mining machinery and equipment and certain underground works; there are special pre-production allowances and other smaller matters attached to it, which more or less conform with the principle underlying the Clause.
When we were in opposition these matters were debated in the House of Commons at some length. I well remember that from 1946 onwards the Lord Privy Seal and others supported this principle. I equally remember the Chancellor of that day refusing it, and the Division which occurred.
If the Chancellor should see fit tonight to give a negative answer to the proposal contained in the Clause, it might well be that he will use the argument that it is not a commercial proposition to produce this wealth. I would like hon. Members to realise that if that is the case he has nothing to lose by accepting the Clause, because it does not operate until a profitability arises from the exploration and exploitation of our mineral wealth. If, on the other hand, I should be right upon this matter, and considerable mineral wealth is developed, he stands to gain immeasurably. It is interesting to note that those who are technically expert on this subject not only believe that that considerable wealth is there, but put figures to it which are quite staggering.
There are definite factors arising which lead one to believe that sums of £300 million or £400 million are by no means too high to contemplate in this connection, should these projects, in fact, be started. As far as I can see, the Chancellor wins all round by the acceptance of the Clause. It is my view that we shall never overcome inflation for any length of time without the development and discovery of new means of wealth. if hon. and right hon. Members think deeply upon this subject they would have a hard battle to explain how inflation can be stopped without the development of some new sources of wealth. What could be better than developing the Cornish mining belt?
So far, we have been listening to hon. Members asking for concessions in one direction or another, for an industry or for individuals. That is quite proper and right in any Finance Bill debates. But in this case we are asking for no subsidy, we are asking for no money; we are asking for an opportunity to develop the mineral wealth of the United Kingdom, and that is all. I trust that the Chancellor will see reason in my argument. It may help him in combating inflation and developing our mineral wealth. If it were successful, as I believe it would be, it might be of such a magnitude as would literally alter our whole economic life. It cannot possibly do any harm. It cannot take anything from the Revenue. If it is successful it can give a great deal to the Revenue.
I do not wish to delay the Committee any longer. I hope that my hon. Friends


will speak in support of the Clause. I sincerely believe that it is not—as some hon. Members might think—an effort to try to develop one part of the United Kingdom. The reason behind our tabling the Clause is that some of us believe that if the Chancellor accepts it, or the principle underlying it, the country may have an opportunity of producing new wealth of such a nature as to alter the whole of our economic life.

Mr. John Taylor: The hon. Member for Bodmin (Mr. D. Marshall) has moved his new Clause in order to provide the opportunity for development to a very important group of industries which, as he says, have their ramifications and their importance in every section of industry in the country. My new Clause which is being discussed with the two Clauses in the name of the hon. Member for Bodmin and other hon. Members is intended to exempt shale oil from Excise Duty. The reason for the Clause is not primarily to secure the development of the oil industry of Scotland. but its survival.
Very few people know that we produce oil from shale in this country and that this industry, which is the pioneer oil industry of the world, is situated in the constituencies represented by my hon. Friend the Member for Midlothian (Mr. Pryde) and myself. Oil was produced from shale in Scotland before a drop of oil was produced anywhere in the word either from oil wells or by any other means.
The shale oil industry is now suffering a very serious and steady contraction. If that contraction continues at its present rate this old and efficient pioneer oil industry which produces a very high quality shale oil will vanish altogether. The industry would be comparatively prosperous were it not for the existence of taxation. This matter is in some respects a hardy annual, a sort of half-hardy bi-annual inasmuch as it comes up for discussion about every other year. But this is the first time that my hon. Friend and I have tabled a Clause advocating not merely remission of taxation or assistance to the industry in some partial way, but the complete exemption of this industry from taxation.
When on previous occasions we have argued in favour of partial exemption, the Treasury reply has been that it was

not possible to give preference to one section only of the indigenous hydrocarbon oil production, and that it would have to be granted to every section of the industry. I could never follow the logic of that. I cannot see why it is not possible to give relief to one hard-hit section of the industry. There are very good reasons why relief should be given to this one specific section of our home oil industry. In the main, other sections of the hydro-carbon oil industry in this country produce oil as a by-product of other main products.
In this case alone, with the exception of the small proportion of oil produced from oil borings in Nottinghamshire, the oil produced from shale is the main product of the industry. We have our byproducts which, incidentally, are valuable to the national economy. We produce a special high grade sulphate of ammonia which is a very valuable fertiliser and a wax which is used by a number of industries, particularly by the electrical industry.
We produce bricks from the spent shale. We produce detergents of a very strong character for industry and of a milder character for domestic use. As I have said before in this Committee, this is an industry comparable to the pig-breeding industry—we use everything but the squeal.
11.0 p.m.
The abolition of the tax on shale oil would do no harm whatever to the other sections of the indigenous hydro-carbon oil industry and would be the salvation of the shale oil part. The cost would not be great. In the last financial year the amount of taxation was about £1,100,000. Because of current contractions in the industry it would in any case probably be considerably less next year—certainly less than £1 million.
When talking of costs we have to ask ourselves what is the cost of oil. As a commodity, its cost is very difficult to assess. For example, how much is added to the cost of Middle East oil by our operations in Cyprus? What is the cost to the national economy of the changes in our oil organisation which we shall be discussing tomorrow? The world runs on oil. It is a very important, politically inflammable liquid at the present time. The world will continue to run on oil during the next generation, in


spite of all our talk of the development of atomic energy as a source of power for industry.
It is really incredible that a Government in this country today should permit, by inaction—if this new Clause is not approved—any source of oil to go. As far as I can see, it is certain that unless we have remission of taxation here the shale oil industry will continue to contract and, sooner or later, will die. We have been told quite recently by the Economic Secretary that this industry already has a substantial subsidy in the shape of a 50 per cent. preference—a preference of 1s. 3d. per gallon in Excise Duty. I cannot follow that logic. To claim that as a subsidy is rather like the highwayman who takes the lady's jewels but gallantly hands back her purse with a flourish as a gift from himself and rides away feeling that he has been generous.
The industry itself gives a subsidy to the nation, though it is an unseen one. To some extent it saves us dollars because every drop of oil we produce here saves us buying it elsewhere, and some of that must be dollar oil. It also saves tankers, and in other ways it makes a very valuable contribution to our economy. How else can we save this industry except in this way? The price of its product is fixed. If its costs rise, as they have been rising steadily, in common with the costs of production in every other industry, it cannot raise its price accordingly except by the general increase agreed to by the oil industry, and the oil industry has been exceptionally careful about increases in its price rates.
We have tried every other way to get assistance for this industry and my hon. Friend and I have this thought in our minds. Our plea is not merely for the salvation of an industry—that, surely is important enough—but it is also for the salvation of many of our constituents who are engaged in this industry. Already, a quarter of the manpower of the industry has been declared redundant. A few of the men have found continued employment in the oil refinery at Grangemouth, which is not far from the shale oil fields. Admittedly, that involves some rather awkward bus journeys, but they have

this employment. Unfortunately, they represent fewer than 10 per cent. of those declared redundant.
The fact that this industry seems to be under a sentence of death means that the whole morale of those workers who are continuing in it has been reduced. Younger men are not going into it, and the older ones who have families are seeking ways and means of getting out. This is a small industry, employing fewer than 3,000 people—the figure used to be 10,000 or 12,000—and it produces only about one-tenth of our indigenous hydrocarbon oil. But it is Scottish oil; it is British oil. It is good quality oil, and we ought not to let any source of oil production go out of existence.
For that reason, and because we believe that this is in the nature of a test case for the Government's intentions about full employment, we appeal to the Chancellor. Do the Government intend, remembering what they say about full employment, to stand by and see a whole industry slaughtered in this way? Displaced workers have to travel long distances, but even in the outlying areas saturation point is being reached. Potential unemployment, which has not yet shown itself to any appreciable extent, is a continuous worry to constituents of my hon. Friend and myself.
This small concession for which we ask is justified as being necessary for the salvation and continued operation of an efficient and old and valued industry which Scotland has regarded with some pride. This industry has given a great many technical devices to the oil industry of the world. It has some fine refineries at Pumpherston and Westwood, but so far as my constituency is concerned it is dead. The industry is confined to the Midlothian constituency, but a number of the workers still live in my constituency. Their homes are there and it is for them, and their families, and for this ancient and valuable industry that I make this very sincere plea to the Chancellor tonight.

Sir Harold Roper: I hope that the hon. Gentleman the Member for West Lothian (Mr. J. Taylor) will forgive me if I do not follow him in the problem which he has so forcibly put foward and with which I have a very full measure of sympathy. It differs, how-


ever, from the object of the new Clause which my hon. Friends and I have tabled and which was so ably moved by my hon. Friend the Member for Bodmin (Mr. Marshall).
Not only does the problem put forward on behalf of the Scottish shale oil industry differ froth our problem in Cornwall, but the remedy differs, also. Our Cornish problem relates to the fact that below the surface of our land there are undoubtedly non-ferrous minerals in substantial quantity; but new development has come to a complete stop because of the high level of taxation.
A hundred years ago, we were producing in this country non-ferrous metals which, at today's prices, would be worth £17 million a year. Today, the production figure is down to about £1 million. In those days we were producing a quantity of copper, but probably there is nothing left of that metal worth developing. Tin and lead have been mined in considerable quantity and the experts tell us that quantities still remain.
Then there is wolfram, which nowadays is an important metal. We do not know its potential production figure because in the palmy days of the mining industry in this country it was regarded as a waste product. In the First World War, however, when we were badly in need of wolfram, it was developed to the extent of nearly £2 million at today's prices. In the Second World War we were again in serious need of wolfram and great efforts were made to recover it. If we were somewhat less successful than during the First World War, the reason was that many of our tin mines had closed.
It is important to recognise that the reason for the decline of the tin mining industry in this country, particularly in Cornwall, was not the exhaustion of the tin but the discovery of more cheaply produced alluvial tin in Malaya. Although the best of the tin in Cornwall may have been worked out, there is good reason to believe that there is plenty left, and we shall need to produce it some day.
In this situation, it is important to realise that in the world as a whole no substantial new source of tin has been discovered for a quarter of a century and more. As far as we know, we must continue to depend on the existing sources

of supply. Of the tin now being produced, 60 per cent. is produced in the countries of South-East Asia. We are happy in the knowledge that the new Malaya has the firm intention of remaining within the Commonwealth. Nevertheless, we have too many eggs in, not one, but two, baskets, because the second of the world's important producing countries is Indonesia. These two baskets are in a part of the world which. today, is none too settled.
It should be mentioned also that before the war the most important wolfram-producing country in the world was China. That wolfram production today is completely lost to the free world behind the Bamboo Curtain. In these circumstances it is expedient to note that no new development is taking place in this country. No one will risk the heavy finance which is necessary for such speculative industry as tin mining if the fruits of success are to be taken away in taxation.
11.15 p.m.
My hon. Friend the Member for Bodmin has described what is being done in other countries, especially Canada and, nearer home, in Ireland. We hope that the Chancellor will ask himself why those examples should not be followed in this country. It may be that he has had fear of setting an awkward precedent. Yesterday, in this Committee, we were discussing Premium Bonds. Perhaps the Chancellor realised that the bonds scheme could not be successful unless the prizes offered were free from taxation. I suggest that it is a short step, and, I hope, an easy step, for the Chancellor to take from the Premium Bond to acceptance of our new Clause, because unless it is accepted no development of tin will take place.
Before he rejects the Clause I hope that the right hon. Gentleman will consult the President of the Board of Trade, who was, at one time, a member of the Westwood Committee which reported on the mineral development of the United Kingdom. In a minority Report, he rejected what he called the two main conclusions of the Committee, but wound up with his own solution, his summary of which I will read to the Committee:
 I conclude that it is possible to further mineral exploration and development in the


United Kingdom by reducing the general level of taxation, and the removal of the complex of administrative barriers which at present hamper and restrict it.
Reduction of taxation was the solution put forward by my right hon. Friend at that time.
Most important of all, this Clause will cost the Treasury nothing, because unless it is passed there will be no new mines to pay tax. The intention of the Clause is to create conditions which will restore the industry to some degree of prosperity. If it is successful, the Treasury stands to gain in the revenue which must come from a successful industry. I hope that the Chancellor will see his way to accept the new Clause.

Mr. David J. Pryde: In rising to support my hon. Friend the Member for West Lothian (Mr. J. Taylor), I wish to extend a welcome to the hon. Members on the other side of the Committee who have introduced the two other new Clauses, which are very useful. They can, for instance, dovetail into the objects of our proposed new Clause to do something which apparently some people have forgotten. The shale oil industry is not a dead industry, and rather than allow it to die the Committee ought to see to it that it is extended and expanded. As has been said, it is under sentence of death.
I have here the political register giving the number of electors affected by the shale-bearing area of Midlothian. More than 9,200 electors will be affected by the policy which the Government is pursuing today. Over 9,200 electors will be affected by the policy that is being pursued by the Government. I do not know how many are affected in West Lothian. The 9,200 do not all work in the employ of Scottish Oils operators, but nevertheless they include tradesmen, shop keepers, doctors, ministers, lawyers, and so on, and all these people are dependent upon the shale-producing area of Midlothian. In fact, Burn Grange, the colliery which a few years ago was the scene of a great disaster, is contained within a few yards. West Calder and eight large towns and villages in my constituency will be rendered derelict.
While there may be some relief given to the unemployed in West Lothian, there can be none in Midlothian itself. The National Coal Board has told us that it can fully staff the coal mines of Mid-

lothian by local labour, and even the agricultural land of that part of Midlothian is very poor indeed. In fact, in Scotland less than 20 per cent. of Scottish agricultural land is described as good.
Nor can we find any relief for the unemployed in the carpet weaving industry of Midlothian, because carpet weaving is in the doldrums, and our paper mills are in a very uncertain state. We are told that our men will require to go to the West Midlands or to Fife. Imagine the discontent which is being developed at Glenrothes, and one can understand that our people are not keen to shift to a place which is likely to be a storm centre.
As for the West Midlands, discussing the position with the local union officials of the N.U.M. on Sunday, I was told that there is no relief in this quarter because only recently one of our young men volunteered for work in Warwickshire and he was told that he could not be accepted. Nor could they accept any labour from Scotland because they were intending to get a large supply of former mining labour from the Standard motor works.
Some people imagine that the shale mining industry of Mid and West Lothian is subsidised. They also talk very carelessly about the imported oil not being in receipt of any subsidy. I intend to disabuse the minds of these people. Last Wednesday a deputation of the Shale Miners and Oil Workers Union of Mid and West Lothian met the Minister of Fuel and Power, the Economic Secretary to the Treasury and one of the Joint Under-Secretaries of State for Scotland. This problem to us is a major one. Our proposed new Clause emanates from a great human tragedy. The Chairman and the Secretary of the shale oil workers' union demonstrated that the industry did not receive one penny piece of subsidy from the Treasury. True, as my hon. Friend has pointed out, he and I on appeal to the previous Chancellor of the Exchequer obtained some satisfaction in that Scottish Oils was permitted to sell its product at something like a competitive price against what is termed "free" oil—the foreign imported oil.
This industry produces some of the finest and most valuable by-products in the country, and there is no reason why that should not be continued. Surely that is in itself a great asset to the nation and to the Treasury in saving dollars.


I want to put out to hon. Members that, since the day the right hon. Gentleman the Member for Woodford (Sir W. Churchill) bought a controlling interest in the Anglo-Persian Oil Company, the British taxpayer has subsidised the importation of foreign oil. I, for one, have never criticised the right hon. Gentleman for that action. I regarded it as a masterpiece of foresight. But who paid first to square the sheiks of that region?
It is alleged that one of those Arab States is inhabited by people who can command, each and every one—man, woman and child—a sum approaching £1,000 each. That, I suggest, came from the British taxpayer. Who paid for the harbours used? Who paid for the armies to protect that oil? Who paid for the battleships, the aircraft? Was it not the British taxpayer? My hon. Friend says that we are engaged in work in Cyprus today which is allied to the oil route to Europe. That may be so or it may not, but I am not arguing that tonight. I suggest, however, that we paid the Arab Legion to defend the pipe-line. So it is apparent that there have been concealed subsidies for the so-called free oil and that it is not free oil at all.
The answers of Conservative Ministers are like the laws of the Medes and Persians, they never change. Browsing through some old HANSARDS in the Lobby, I came across the answer to a question put by the right hon. Thomas Johnston when he was in this House. He asked if the coal owners who were to shut down their pits were to be compensated, and what compensation would accrue to the rank and file of the miners. He was answered by the Minister of Mines of that day, who said, yes, the coal owners would get compensation and the workers could get the benefit of the labour exchange. That was the exact reply I received recently from the Minister of Labour when I asked what was to happen to our labour.
There is no chance of the redundant shale workers of Midlothian getting any relief in regard to employment, as I have suggested. So I suggest to this Committee that we embark on a constructive programme, and if the two proposed Clauses are accepted, then the road is clear. Because shale is not in an

exhausted condition like the coal pits of that area where there is no hope for the unemployed there.
In Midlothian there are vast deposits of shale. All the measures which are evident in West Lothian are evident in Midlothian. It is known by proved operation that those shale measures come right round the foothills of the Pentlands on their eastern slopes, right down past Penicuik in my constituency. In fact they were worked when the Clippens Oil Company got into trouble with the old Edinburgh Water Trust and went back.
The new pit at Bilston Glen being sunk by the National Coal Board could easily tap those shale measures by driving level mines to the west, just as they expect to tap the coal measures by driving mines to the east. Not only would they tap the shale measures, they would also tap two seams of very good-class ironstone, and I am informed by old miners who have worked on the surface of the measures there—although at probably 80 or 90 fathoms deep—that there are other valuable measures.
11.30 p.m.
We know that these shale measures crop out on the north shore of the Firth of Forth. I cannot say that they are the same measures—they have never been bored as the National Coal Board has bored the Firth for coal—but I think we can assume with a certain degree of accuracy that the measures go right through below the Firth.
I am going to suggest what I have suggested for years. When my late lamented friend Joseph Westwood, then Secretary of State for Scotland, outlined for me his plans for the importation of oil and the great expansion of Grangemouth, I pointed out that this would damage the welfare of both West Lothian and the western portion of Midlothian. Joseph Westwood said that there was no reason why there should not be a second edition of the Westwood refining plant in Midlothian which would be in the centre of a plentiful supply of labour, in the centre of good roads—non-existent in that part of the country where the mines are today—and in the centre of a railway system.
A bold policy would be far more appropriate to the problem facing West Lothian and Midlothian than allowing


the district to be murdered. We cannot just lift people from the surroundings in which they have lived for 50 or 60 years. Many of the men are ageing and are past the stage when they can adapt themselves to new mines or anything else.
These are good, industrious men, and we ask that a sensible approach be made to the problem. There has not been a dispute in the industry there since 1924, and I am sure that in no other phase of mining life in Britain has there been a record of that description. I appeal to the Committee to consider what I and my hon. Friend have said, and I ask the Chancellor to do what any sensible person would do, maintain the industry in which these men have been engaged all their lives.

Mr. G. R. Howard: I do not want to detain the Committee for more than a moment, but it is only right that I should speak because I have in my constituency one of the very few tin mines still working in Cornwall.
Of the future of the Geevor mine, it has been said in the book to which my hon. Friend the Member for Bodmin (Mr. D. Marshall) referred that it is well known to professional mining engineers and geologists that in the vicinity there ere large reserves of tin, and large, reserves are known to exist in the adjacent Levant mine. It is also said that the potential reserves of tin at Carn Brea, are estimated to be about £50 million.
Reference has been made to sources of tin, such as South-East Asia. We all hope that that tin will be available to us, but it seems to me that if we can do anything to develop our own supplies at home in peace time on a steadily progressive basis, it will help us in the event of any of the foreign sources being cut off. From the point of view of our own finances, it seems obvious that this would be of great advantage. If that is not done, what happened in the last war Swill be repeated; because when war tomes our supplies are cut off and there is a sudden panic order from the Government, which says, "You must spend anything, enormous sums of money, to get the tin." That was done in the last war. Then, as the submarine menace subsided,; so the interest in mining subsided as well.
We must remember that we still have the fear of another war—pray God it may never happen—but if it comes, it will be

with a submarine menace such as we have never had before. It may well be that we shall be very grateful for any steps we take now to see that our tin mines are not only kept going in peace time but are such that we can readily expand the industry in time of war, for emergency, or for balance of payments reasons. Last year we had a magnificent production of 630 tons, which is a great effort for one mine.
We produce in Cornwall the finest mining engineers, who go all over the world, and the finest mining machinery. We should do everything we can, apart from employment and other reasons, to make it possible for the tin mining and other natural sources of wealth in West Cornwall to be developed.
There is also the important new industry of uranium, and any expansion of mining would help in that regard. I hope the Chancellor will bear those facts in mind and consider whether something could not be done to develop those natural resources on a steadily progressive scale in peace time, so that in the event of such emergencies as I have described we are not caught with the need for sudden vast expansion which can be avoided if we take steps now.

Mr. Hayman: There is a link for all three new Clauses because they are seeking to get exemption from taxation which, in the case of Midlothian, will allow an industry already existing to continue. I come from Cornwall and represent what used to be known as the mining division of Cornwall. I know only too well what it means when an industry of this kind is almost under sentence of death. For long years the Cornish miner had to emigrate to all parts of the world, whether he liked it or not, because the industry was neglected by the nation. I do not want to detain the Committee for long in referring to that.
I want forcibly to emphasise what was said by my hon. Friends the Members for Midlothian (Mr. Pryde) and West Lothian (Mr. J. Taylor) in support of their new Clause. The hon. Member for St. Ives (Mr. G. R. Howard) referred to Carn Brea, which is in my constituency and a mile from my home. The Westwood report referred to it as a highly mineralised area. Reference has been


made to copper which was once mined in Cornwall. In my constituency, there is an area which has been described by Hamilton Jenkin in his book "The Cornish Miner" as the richest square mile in the old world. I suppose that we shall never mine copper in Cornwall again, but those who know say that reserves of tin exist, and I certainly should not dispute that assertion.
I would also remind the Committee that my own area of Cornwall was the cradle of the industrial age in Britain two centuries ago. There are the famous names of James Watt, who lived and worked in my constituency for many years; Richard Trevethick, the pioneer of the railways; Humphrey Davy, from the St. Ives Division, who patented the miners' safety lamp; William Murdoch, who first lit a house with gas in Britain, and William Bickford, from my constituency, who invented the miners' safety fuse. These are examples of what has come from Cornwall as the result of the exploitation of its mineral resources, in which it was, and may still be, very rich.
Fifty years ago, 10,000 people were employed in the tin mining industry in Cornwall. Today there are fewer than 1,000. The mineralised zone of Cornwall is 10 miles wide, running from the Lands End district right up to the Gunnislake district, in east Cornwall. Nobody knows what may lie below, in the granite rock. It will be difficult to exploit it.
This age will probably be known as the age of metals. We are consuming metals at a prodigious rate in the world today, and, as has already been said in this debate, the known resources of some metals, including tin, are very limited. It seems to me, therefore, that something should be done to see that the potential resources of metals in Cornwall are exploited. I do not mind how they are exploited. If they exist, and private enterprise is not prepared to exploit them, then the State should do so. I am a Socialist, and the fact that the State may have to undertake this job does not frighten me in the least.

Mr. D. Marshall: In 1946, the then Chancellor of the Exchequer answered that argument by saying that the Gov-

ernment had come to the decision that they were not prepared to do so.

Mr. Hayman: What happened ten years ago is no criterion of what may happen in future. I am expressing my own opinion as a Socialist, and saying that the fact that the State may have to undertake the job does not frighten me. If there is any justification for the exploitation of these minerals, the money which will be spent on it will come out of our national resources, whether paid by the State or by private enterprise.
Our School of Mines in Camborne is sending trained mining engineers all over the world. I suggest that this is a very valuable invisible asset, because allied with our School of Mines is the mining machinery industry, which employs 2,000 workers. Of their products, 80 per cent. is exported to mining camps overseas. This is extremely important for my constituency and for the whole of Cornwall. I therefore have much pleasure in supporting all three Clauses.

Mr. Geoffrey Wilson: I do not wish to prolong the debate. Owing to an engagement elsewhere, I was not fortunate enough to hear the speech of my hon. Friend the Member for Bodmin (Mr. D. Marshall), but I want to put on record the fact that I support him and that I add my name to the proposed new Clause moved by him. I have taken a great interest in the development of nonferrous metals in Cornwall. No development is going on at present, but I am satisfied that the proposals of this Clause would assist in such development, which must be to the benefit not only of the county but the nation.
The hon. Member for Falmouth and Camborne (Mr. Hayman) has referred to the fact that he represents the mining division of Cornwall. That is so, but the boundaries of the old mining division were not quite the same as they are now, and part of that division is now in my constituency. Therefore, it is right that I should put on record the fact that I am also taking an interest in this matter.

Mr. Hayman: We willingly concede that.

Mr. Wilson: I hope that the Clause, if accepted, will be to the benefit of Cornish mining. It certainly would be to the benefit of the country if these mineral resources were developed.

11.45 p.m.

Mr. Thomas Oswald: I have no desire to detain the Committee unduly as the hour is late and I know that the Chancellor must be very tired. I have watched him with his eyes closed this evening, and I have no doubt that he is thinking of what has been said by hon. Members on both sides of the Committee about these three Clauses so closely knit one to the other.
I support my hon. Friends the Members for West Lothian (Mr. J. Taylor) and Midlothian (Mr. Pryde) in what they have said about this acute problem in the Scottish shale oil industry. I talk with some knowledge of the matter, because it was my privilege to negotiate the wages of the men employed on the refining side of the industry with Scottish Oils Limited at the Grangemouth establishment.
The Chancellor and his colleagues are continually asking the people of this country for increased productivity in order to get the nation out of the economic difficulty in which it finds itself at the moment. Therefore, it seems morally wrong, when we have huge deposits in the shale field in Scotland, that this great industry should be allowed to die.
We have all the plant, all the knowledge and all the manpower necessary. All that we have to struggle for at the moment, as far as Scottish shale oil is concerned, is the exemption of shale oil from the Excise Duty on hydro-carbon oils.
In recent years there has been a tremendous development in the use of diesel oil engines for the propulsion of commercial and passenger vehicles. We produce that oil in Scotland and yet we have a redundancy problem which is adding very considerably to the unemployment figures in Scotland. I hope that the Chancellor will appreciate that of the thirteen regions into which the country is divided as far as unemployment figures are concerned, in Scotland we have over 57,000 people unemployed. We are likely to add many more thousands to that number unless some exemption from this duty is given to hydro-carbon oils produced in the Scottish region.
As has been pointed out, the Scottish oil industry was a pioneer industry which has been developed all over the world. It is tragic in the extreme to see it disappearing when that could so easily be saved. No capital investment is required

in this industry. All the machinery exists at the moment; it is only a question of having to face up to the overburdening tax on the industry. That is the reason why the industry is at present in the doldrums.
I appeal to the Chancellor to look very closely at the submissions made from both sides of the Committee on behalf of the clay industry and of the shale oil industry for some alleviation of the problems which they are facing and for the employment of more people in those industries.

The Economic Secretary to the Treasury (Sir Edward Boyle): We have certainly had a varied debate, and I think that this is the first time that it has fallen to me to reply in the same debate to two Inland Revenue Clauses on mining and one Customs and Excise Clause on shale oil. When I think of the varied debate we have had and the number of places we have visited, I am reminded of a discussion I once heard between two learned theologians as to whether the 39 Articles, the four lions at the base of Nelson's Column and the four cardinal virtues added up to 47 somethings. I do not propose to be drawn into discussing Socialism in general or the nationalisation of industry in particular.
First of all, on this subject of metalliferous mines, the new Clause which my hon. Friend the Member for Bodmin (Mr. D. Marshall) moved in such a very able speech proposes that exemption from Income Tax Schedule D and Profits Tax should be given in respect of the first 36 months' profits of a trade, set up after 5th April of this year, which consists in the working of a non-ferrous metalliferous mine. From the wording of the Clause, I gather that my hon. Friend's intention is to limit the exemption to mines within the United Kingdom though, of course, there is nothing in the Clause itself which would explicitly exclude overseas mines operated by concerns liable to United Kingdom taxation.

Mr. D. Marshall: I think that my hon. Friend must be reading from the wrong Clause. The Clause tabled by my hon. Friends and myself states:
 …a non-ferrous metalliferous mine within the United Kingdom….

Sir E. Boyle: I had overlooked that, and I apologise to my hon. Friend.
I think that it is, perhaps, a good idea if, first of all, we see what is the present tax position regarding mining companies. The picture is that a mining concern is allowed to deduct, in computing taxable profits, all expenditure of a revenue nature which it incurs in extracting minerals, and is granted allowances, on capital expenditure spent on finding and developing mineral resources and on plant, machinery and works acquired for that purpose. Furthermore, it is worth remembering that the initial allowance is given on mining works at the exceptionally favourable rate of 40 per cent.
My hon. Friend did refer several times to past debates. He referred to the debate in 1946. He might also have said that both he and I took part in a debate on this subject in 1951, and it is worth mentioning that since then, when my right hon. Friend the Lord Privy Seal restored the initial allowance in 1953, he gave a specially favourable investment allowance to mining concerns of 40 per cent.—for which I think the whole House was grateful—and, now that the investment allowance is suspended, we are back to a 40 per cent. initial allowance for mining concerns.
My hon. Friend referred to this question of mining taxation in the Budget speech. The whole question of the tax treatment of mining concerns was reviewed by the Royal Commission on the Taxation of Profits and Income. I would just say that my right hon. Friend is considering the proposals which the Royal Commission made, although in this case there are certainly a number of difficulties. But I must say to the Committee that, if any further tax relief is to be given to mining concerns, there are real objections to those tax reliefs taking the form proposed in the new Clause, and I should like to put those objections.
Relief of this kind would mean that non-ferrous metalliferous mining concerns would be given preferential treatment, not only as compared with other kinds of mines, but as compared with industry generally, and if a tax-free holiday were conceded to certain mining concerns, it would be extremely difficult to resist similar claims for preferential treatment for other mines, and for other sections of industry. For example, the

shipping or agricultural industry might perfectly well claim that its particular importance to the national economy, or the degree of risk involved in its enterprises, entitled it to preferential treatment. [HON. MEMBERS: "No."] Certainly, claims of that nature would be made.
We will certainly consider the problems of the mining industry, but my hon. Friend must honestly agree that the fact that the mining industry does enjoy a 40 per cent. initial allowance—which is much bigger than most industries enjoy—does show that the special problems of that industry have been noted by the Government and we do realise its difficulties. I cannot say more than that this evening, except that, as I say, we will certainly look at this, and my right hon. Friend is still considering the recommendations of the Royal Commission on this subject.
I pass to shale oil, which is a subject familiar to many of my colleagues and on which several deputations have been received at one time or another, and to which a good deal of attention has, of course, been given. Here I think I can only summarise the objections to what hon. Gentlemen opposite are proposing. I am afraid that they will have heard them on a number of occasions, and they must forgive me if tonight I have to play a rather old tune, but I cannot do more than simply go over what the difficulties are.
The acceptance of this proposal would entail a direct cost of about £1 million a year, and it might entail an indirect cost running into several millions of pounds a year. The indirect cost might well prove to be considerable, and I do assure hon. Members that the matter has been very carefully considered recently by Departments and by Ministers.
The position is that the indigenous oil industry gets some preferential assistance —amounting to about £1,250,000 a year —and additional relief might have embarrassing repercussions which would surely be unwise in the absence of any very compelling reasons for the giving of additional relief in order to prolong the life of this industry which has no prospect of becoming self-supporting. There seems no prospect of it becoming self-supporting in the future. If the industry were geared to rely on the assistance of the full amount of the present Customs duty, the same level of assistance could


not be maintained without, in effect, granting the company a direct subsidy if Customs were reduced in the future.
So far as the unemployment situation is concerned, hon. Members will know that this has been carefully examined by the Scottish Office and by the Ministry of Labour. All I can say tonight is that there is no immediate unemployment problem in West Lothian. Workers will be. it is hoped, absorbed in existing or new industries; but, as hon. Members will agree, this is not the easiest area in the country.

Mr. Pryde: Would the Economic Secretary care to refer to the Midlothian unemployment figures—I have the latest figures here?

Sir E. Boyle: We realise that there is a problem here, and the Scottish Office and the Ministry of Labour, as I have said, will do their best to meet it, but for the reasons which I have given. I must ask the Committee not to accept the new Clause.

Sir Ian Fraser: I should like to ask just one question. The Chancellor is here and has heard this debate and must have been impressed with the fact that the Economic Secretary did not really know what he was talking about. Nobody is a greater admirer of the Economic Secretary than I. and I know how overworked financial Ministers are; but the hon. Gentleman has really not done more than read a brief. Cannot the Chancellor himself look at this again?
Right hon. and hon. Members may wonder why I, from the north of England, should intervene; but the fact is that, in business, my family have been purchasers of tin from Cornwall for the last 150 years. It is running out now, and we do not get so much; but it would be an enormous source of strength to Britain if these deposits about which we have talked tonight could be properly exploited. This could be done without any cost to the Chancellor. What a godsend it would be to him to be able further to help our country without any cost; to get something for nothing.

Mr. H. Macmillan: I thought that that hon. Gentleman was not altogether generous to the Economic Secretary who. I think, is the greatest strength any

Chancellor could have to support him. He faced the rather difficult task of having to answer a debate on two subjects, dissimilar in character, and I have seldom heard a discussion of the principles of Income Tax at the same time as discussion about the Excise.
I can only say that the benefits given to mining— initial allowances, and others —have put the industry to special advantage. The special concession suggested by these Clauses, however much our sympathy may be for this work in Cornwall and elsewhere, seems quite contrary to the whole principle of our taxation system.
12 midnight.
I must ask the Committee to think; seriously before we start applying to other and developing industries a principle which is quite contrary to all our; tradition. Whatever might be the best means of assisting these industries, I do not think it would be right for the Committee to use a method so unusual and With such possible dangerous repercussions.
I will, of course, gladly give the assurance to all my hon. Friends, who I know are very interested, that we will consider whether further assistance of any kind 'can be given towards the exploitation of these mineral resources if it is right and wise to do so, but I honestly feel, and I; think that those who study our taxation system would agree, that the method suggested is not one that would stand up to the pressure which might be put upon it.
Question put and negatived.

Mr. H. Macmillan: I beg to move, That the Chairman do report Progress and ask leave to sit again.
We have dealt with these two new Clauses and, I understand, we are to save: the third for the pleasure of starting Monday with a Division, which is always a good way to begin a day.
Question put and agreed to.
Committee report Progress; to sit again this day.

ADJOURNMENT

Resolved, That this House do now adjourn.—[Mr. Wills.]

Adjourned accordingly at two minutes past Twelve o'clock.